Compensating Investors in Self-Funded Deals (e.g. <20%w/SBA Loan)

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by a searcher from University of Maryland at College Park
in New York, NY, USA

3yrs ago

Compensating Investors in Self-Funded Deals (e.g. <20%w/SBA Loan)

Hi all,

Hoping to get some help thinking through options for compensating a minority investor(s).

Considerations include:

1. Use of investor funds (e.g. cash to buyout existing owner vs. funding operations/growth)
2. Cash distributions -- at what point does an investor expect distributions or dividend
3. How is my debt (SBA) service considered when calculating EBITDA and reinvestment into the business

And, what else should I be considering when bringing on minority (<20%) investors to fund the acquisition?

Feel free to comment, DM, or email redacted

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reply by a searcher 1yr ago
from California State Polytechnic University in Columbus, OH, USA

Hey again ^redacted‌! I am still working on your email - but curious regarding what you said here - do you see a lot of investors being okay with this? fairly typical?

reply by a lender 1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We do not really deal too much directly with investors, but it is fairly typical from a lending perspective so I do not hear them having a problem. It is all about what you can negotiate.