Non-SBA Lending

October 20, 2023

by a searcher from Rice University - Jesse H. Jones Graduate School of Business in Houston, TX, USA

Hello,

Looking for suggestions on non-SBA lending at the $1M mark. Company doing $1M in revenue and around $400k in EBITDA. Already rolled $130k into the deal and $150k in seller financing for the $1.3M price point.

Let me know if there are any suggestions here.

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

Unfortunately there are not a lot of lenders doing conventional business acquisition financing for smaller deal sizes. Most of those that will likely would want more equity into the transaction unless there are plenty of hard business assets to back up the transaction. On a $1.3 million purchase price you are likely looking at a maximum loan amount from my experience in the 50% to 60% range, which would mean you would need $520,000 to $650,000 in equity.

Reply by a searcher
from Harvard University in Miami, FL, USA

Curious why you wouldn’t go the SBA route? Interest rate? PG? Is the EBITDA indicative of cash flow? You may be able to get out of debt in a few years. I’d talk to regional/local credit unions and see if you can get a deal through them.

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