Background: I am a self-funded searcher who plans to also self-fund the majority of the equity as well. Using hypothetical and simple numbers, let's assume a $4m purchase price to be funded 75% in SBA 7a debt and 25% in equity (so $1m in equity). The $1m in equity to be comprised of $700k from me (70%), $150k from friend A (15%), and $150k from friend B (15%).

Question: What would be reasonable or typical equity structure and terms for these two investors in this type of deal? I prefer to keep things simple and leaning towards common stock, but I also recognize that I am taking on outsized risk due to the personal guarantee that only I will have, since the two individual investors are each below the 20% threshold. Would common stock or preferred stock be recommended in this case, and if so what would be a reasonable structure and and terms? Thank you!