When structuring a self funded search / independent sponsor deal funded with maximum SBA debt, obviously the intent is for the sponsor to retain as much equity as possible, Moving forward, how have you seen those debt service payments treated?
Are they treated the same as in a traditional single owner business or as distributions since they are essentially covering sponsor debt? i.e. - Does the equity partner receive a monthly distribution to match the DSC in their pro rata share?
My assumption is this is up for negotiation but I would be curious as to how it has worked for others.
SBA / Debt payments as distributions?
by a searcher from Brigham Young University
More on Searchfunder
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.
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.
135 views
8 comments
Sign in to see all replies.
Create an account.