Combining SBA loans, seller financing, SBIC, and other financing sources

by a searcher

1 year ago

Hi Searchers,
I am an experienced entrepreneur, but I have no first hand experience using debt and creative structuring to finance a business acquisition.
I would like to learn more about best practices for creative deal structuring based primarily on debt. The main goal being the least amount of cash out of pocket as possible. Such as SBA 7a 90% + seller note 5% + cash 5%.
Also, I would like to learn more about the "rules" of using the acquired company's cash flow to service the debt.
If any of you have sources that you are willing to share such as books, youtube, people, consultants, finance companies, banks, websites, etc , I would be grateful.

3 likes
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3 comments

intermediary from The University of Chicago - Booth School of Business

SBA financing is available for both an Asset purchase and Stock purchase. You can structure 90/5/5 for either. with SBA financing. 90 can be SBA loan only or SBA loan and Seller Note; 5 is investor equity, and the second 5 is seller note in standby position behind SBA.. , PG is required by all owners who own 20% or more equity. There has to be at least one person with 20% ownership. SBA does not allow contingent payment, and limits seller involvement to maximum of 12 months.

1 year ago | like reply | 2 likes

searcher

Wow, thanks for the feedback!

For 3) Stock Purchase Agreement; Do you know where I can read / learn more about this?

This idea is very interesting to me.

1 year ago | like reply | 0 likes

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