Lending Option that allows minority owner to stay with company

by a searcher from Pennsylvania State University

3 years ago

I have looked at a few deals lately where a key employee owns a minority stake and wants to continue working with the business. What are other lending options since SBA will not allow seller to remain over 1 year? What would be the expected down payment needed for that kind of deal?

2 likes
166 views
11 comments

professional from Harvard University - Harvard Business School

I have heard of people using separate "phantom equity agreements" to allow for minority interest while simplifying the paper work. I am not sure how common it is, but I know it can work.

3 years ago | like reply | 0 likes

lender from St. Mary's College of California

Last note - this option may be of use, especially in lieu of putting more cash equity into the purchase.

3 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Investor seeking Self-Funded Search Deals

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Downsides of "buying a job" below 750k+ EBITDA?

6-7x for a Self-funded Search Deal?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.