I've been talking with the owner of a very interesting business that was initially looking for growth capital and is now open to selling a portion of the business so long as it comes with growth capital. Assume $2M for acquisition value and $2M for growth capital. Is it possible to do fund both of these (with an equity infusion) under the same SBA loan given the changes that just went into effect? The seller would retain partial ownership (likely 40%).
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2. The trick is to get the loan inside the Company (X). Possible simultaneous steps. Assume X has 100 shares. a) X borrows $2 M, b) X issues new 60 shares for $2 M. c) X redeems seller's 60 shares for $2 M. d) You and seller sign bank documents and guarantee. End result: You own 60%, Seller owns 40% and X has $2 M growth capital.