Merging two businesses with an earn-in equity %

by a searcher

1 year ago

I am a self funded searcher that is currently looking at merging two businesses together. Business 1 is owned by Owner A. Business 2 is owned by the same Owner A (50%) and Owner B (50%). I am looking to buy in to the newly merged business which would dilute both of their equity, and slowly earn in more equity with performance hurdles over time. Does anyone have experience in structuring a deal like this? Any tips would be appreciated. I plan on using SBA financing for the buy-in portion.

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intermediary from Indiana University at Bloomington

That probably won't fly using the SBA. If it does technically, the SBA has a 6 month lookback period on ownership and all owners then would have to guarantee 100% of your loan, which is unlikely for them to do.

1 year ago | like reply | 0 likes

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