Has anyone ever acquired a business without a PG and with little money down?

March 02, 2026

by a searcher from Columbia University - Columbia Business School in Jersey City, NJ, USA

Hello. I'm looking to acquire a business in the US with the ultimate goal of forming a HoldCo. I have one I'm targeting that's $10m price / $1.9m EBITDA, however I have two major roadblocks: 1. Lack of liquid assets due to student loans, mortgage, etc. 2. I'm not in a position to put a PG on a loan. I realize these are the two major hurdles, but I'm curious what ways people have been able to get off the ground without these stopping them. I know this doesn't mean I'll be able to get 100% (or even a majority) of a company and I will have to be flexible in some areas, but I want to know what sacrifices I'll have to make to get my journey started and what a first deal could realistically look like.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Unfortunately you are going to struggle to get something done. The only way to get a deal done with minimal financing is through the SBA 7A loan program, and the SBA guarantee limit maxes out at a loan of $5 million. Even with an SBA 7A guarantee in place you would need to come up with at least 10% down. You can get away with as little as 5% down, but the SBA lenders would require the seller carry a note back for 5% of the loan on full standby for the life of the loan to do that. Now you do not have to put the cash in for an SBA 7A loan, it could be investor cash. Even if you wanted to go SBA, you would need to have a solid net worth and post-closing liquidity as well. Except for maybe a rare circumstance where it is an employee buying out the seller, no lender is going to do a $5 million loan for someone with a small net worth and no post-closing liquidity. It is just going to be too high risk. If you move away from SBA financing to conventional or non-bank financing, those lenders are going to require more equity and depending on the size of the transaction and type of loan, they are likely to require a personal guarantee as well. If you want to use the Independent Sponsor Model where you raise equity from an investment partner that backs the loan, then you would potentially buy a business with minimal equity of your own. However, you would likely own 25% or less of the business and would really be running it for equity partner. That works but you need to have a solid background and strong business plan for acquiring a business to get investors to back you for that model.

Reply by a searcher
from Harvard University in Palo Alto, CA, USA

Thanks for the tag ^redacted‌. If you are flexible in owning an equity piece vs. the whole company, you may go down the path of finding a seller who is looking for a successor and work for them for a while with the understanding that if all goes well, you can get some equity and become GM or CEO for them. This would be particularly effective if you find a company in your area of professional expertise. It may also be helpful if you target a smaller deal so if you have less to raise from investors and someone else may be more comfortable signing up for a PG for your loan.

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