Seeking Non-SBA Lenders that Treat Seller Notes as Equity

November 14, 2023

by a searcher from University of Tennessee - Knoxville in Nashville, TN, USA

In honor of Sarah Moore, whose story has blown minds on this platform and others, which Lenders treat Seller Notes as Equity AND lend Sr. Debt up to 75% of transaction price?

(If you're not familiar with Sarah's story, she bought a business with a 75% Sr. Debt/25% Seller Note capital stack.)

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Reply by a searcher
from University of California, Berkeley in Wisconsin, USA

I've done a lot of searching for non-SBA lenders recently to fund the purchase of a non-US based e-commerce business. I haven't closed a deal yet, but I do have some recommendations of where to look. One is to post a pitch for your deal on angelinvestmentnetwork.us. I got an interesting lead from there for a loan that will later convert to equity investment. The other recommendation is to look on the American Association of Private Lenders website (www.aaplonline.com). There are lenders on there that talk about being a 'note-buyer'. I think they mainly refer to real estate notes, but maybe they would also consider a seller note from a business acquisition. Besides that searching on Linkedin/SalesNavigator is worth trying. I've connected with several interesting funding leads through LInkedIn. One of them is someone associated with mirateequityllc.com They do give out 5-year loans for business acquisitions with 7.75% interest. It might be worth submitting your deal on their website if you are looking for non-SBA funding.

Reply by a searcher
from Northwestern University in Nashville, TN, USA

I got a conventional non-SBA loan to fund 70% of the purchase price of my deal. Unlikely they'd go for the same deal in today's rate environment, but happy to share my experience. I didn't understand the part about treating seller notes as equity (bc it's not?), but you absolutely can find non-SBA debt to fund an acquisition.

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