I think there are a couple of points of confusion. 1) Holli said working capital is "only really necessary" if you're doing an asset purchase deal, and further "there's no talk about working capital" in a stock purchase deal. Those statements are not correct. Whether stock or asset deal, you have the same issue of ensuring that sufficient normalized net working capital is transferred via a NWC peg and purchase price adjustment approach (assuming that NWC is not excluded by the terms of the deal.) 2) The form of the transaction doesn't dictate what is included or excluded. You can do a stock sale that has provisions excluding the transfer of working capital (or anything else.) 3) If a debt free, cash free valuation of say $4M was agreed on which includes the transfer of net working capital, then the valuation without the net working capital would be less roughly by the amount of the NWC (assuming, obviously, that it's positive). You don't have to borrow more - it's just $3.5M purchase price plus $500k for working capital. 4) Even if additional financing of working capital were necessary, that amount is going to be paid down (i.e. prepaid) as the company generates available cash flow and/or is able to refinance with a standard line of credit.

Yeah, I watched this video many times and the gist of it is actually the opposite of what the title says. If you can't negotiate WC from the seller, then you have to borrow it, even if the interest rate is going to be higher than historically low interest rates. Just be sure the cash flow can cover it because at the end of the day, you can't play unless you get in the game!