Best way to structure SBA deal with investors

by a searcher

Apr 19,2022

Planning on doing a self funded search and structuring the acquisition as: 10% equity, 10%seller note, 80% SBA loan.

For the equity portion I plan to raise it from 1-2 investors likely around $200k-$500k depending on the company I find.

I have heard that attractive terms are to give 15% equity to the investor(s) for. their 10% injection, which keeps them under the SBA PG line.

For those who have done a deal like this - is this the best way to structure the deal and terms for the investor and entrepreneur? Additionally any tips on how to identify good value add investors?

Thanks!

7 likes
243 views
6 comments

searcher from The University of Texas at Austin - Red McCombs School of Business

^Searchfunder member‌ & ^Searchfunder member‌ - I'll be sending you can email shortly.

01/26/2023 | like reply | 0 likes

lender from California State University, Sacramento - College of Business Administration

‌+1 to Hugo and Brad from the Lender perspective regarding investors and equity, ^Searchfunder member‌ and ^Searchfunder member‌ have created and Equity Workbook Template that helps our searchers do the math on 'economic benefit' of investor's common + preferred structures to ensure you're meeting SBA rules and the spirit and intent of the 20% rule. Email --@----.com and we're happy to share our sba equity template.

04/21/2022 | like reply | 4 likes

More on Searchfunder

Now everyone has unlimited IBISWorld access

Self Funded Acquisition: A few Things I Learned

45,152 transactions are available on Searchfunder (now searchable by keyword)

Investor seeking self-funded deals in the US

Acquired our first company - UpCounsel.com

Reflections On First Week As CEO

Introductory one pager?

Free Playbook to Increase Valuation & Exit Price

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.