Creative ways you would try to structure a $5m deal (with only $250k down)?

by a searcher from St. Petersburg College

Mar 01,2023

What are some creative ways you would try to structure a $5m purchase if you only have say, $250k for a down payment, aside from getting investors to bridge your equity gap?

Ideally while keeping it SBA eligible, If that's even possible within this hypothetical scenario.

Assumptions:
$5m purchase price
Inventory included: $500k
FF&E: $1m
SDE: $1.5m


Open to either hypothetical answers, or even actual numbers from a deal you may have been involved in that was able to get funded.

Cheers!

2 likes
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14 comments

searcher

Hi James, one thing I can say if im understanding this correctly is that an SBA will allow you put 10% down. If the purchase price is 5M that would require 500K but the important factor to note is that 5% can come from you and 5% can come from the seller. That would allow you to put down the 250K and find a creative way to have the seller put in the other 5% equity. Not sure if it does, but hope this helps.

03/12/2023 | like reply | 0 likes

professional from Northwestern University - Kellogg School of Management

Thank you for sharing this useful information!

03/09/2023 | like reply | 0 likes

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