No Money Down Deals

by a professional from University of Michigan - Ann Arbor

3 weeks ago

I've met with a number of self-funded searchers recently who are looking for no money down deals--deals in which the entire purchase price is covered by a combination of SBA debt and seller financing.

This deal structure is often promoted by social media influencers who (conveniently) also sell courses on how to pull it off.

Everyone I know and trust in the lending space tells me a no money down deal is a no go in the current economic climate--searchers have to bring at least 5% to the table, whether from personal funds or investors.

But I thought I'd ask the community. Who's pursuing a no money down deal? Any luck? What's been your experience?

I would also love to hear from lenders. Please share your thoughts!

1 like
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9 comments

professional from University at Albany, State University of New York - School of Business

Hallam - I've helped my partner entrepreneurs complete "no money of my own" deals but have never seen a legit "no money down" deal other than one buyer who took a D.P. course and wasn't smart enough to understand how they were suckered.

1 week ago | like reply | 0 likes

lender from California State University, Sacramento - College of Business Administration

^Searchfunder member‌ nailed the details as always. I’m always curious when someone wants 100% financing or very high levels of leverage as to the specific motivations involved. Brad mentioned several cases where it might be acceptable. Bringing equity to the table (including equity investors) does shift the risk profile from the lenders perspective. Business Acquisition is not a ‘no risk’ endeavor. This lender is looking for a balance in the cap stack.

2 weeks ago | like reply | 2 likes

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