debt with no equity

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by a searcher from University of Pennsylvania - The Wharton School
in Miami, FL, USA

6yrs ago

debt with no equity

Hi Searchfunder Community - I am evaluating a proprietary deal with $2M EBITDA. Looking at a ~$6M purchase price.
Asset coverage: business has $3.5M of A/R+Inventory (all of it good) I am seeking lenders who would fund the entire deal without the requirement of significant equity investment where I and the existing CEO would end up with 90% of the business. Will roll fees.

Real opportunity to take the business to $4M EBITDA through either vertical acquisition or vertical organic expansion. Likely to require additional capital for both over firstredactedmonths.

Be great to hear from all the lenders or suggestions from others on lenders or structure.

Many thanks!

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reply by a lender 6yrs ago
from North Carolina State University in Raleigh, NC, USA

We (Plexus Capital) or other private capital funds may be able to provide a solution here as well. Feel free to reach out and we can discuss: redacted

reply by a searcher 6yrs ago
from University of California, Santa Barbara in Los Angeles, CA, USA

A few people have reached out to me with the same question and I felt it best to post here, although I will also try to reply to you individually.

If you are looking at a sub $2M EBITDA deal, there are not many options other than the SBA. Most non-SBA lenders at this time don't want to lend to companies smaller than $2M in EBITDA and in general don't want a loan smaller than $5M. You can find some non-SBA cash flow based lending options sub $2M but they will likely be more expensive and involve personal guarantees (unless you have heavy asset coverage).

Hope this helps clarify.