Going from part time to full time self funded search

October 11, 2022

by a searcher from United States Naval Academy in Johnson City, TN, USA

How much do lenders/SBA care about seeing W-2 income when it comes to closing and financing an acquisition if you are planning on managing and drawing a salary from the acquisition given the company finances are strong enough to support it?

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Reply by a searcher
from IE Business School in Seattle, WA, USA

In my experience, lenders would "love" to see that you have income from another source (passive income, or income from a spouse, etc.), but it's not high up on their list compared to the other things they're looking at. They will mostly be concerned with how much salary / distribution you're taking out of the business, whether the business can support that amount, & whether you can reasonably live off that amount. If you plan to take a low salary but have little income coming from elsewhere, my guess is they'll be worried. But if the cashflow from the business can support a livable wage for you, there are plenty of lenders out there who won't mind that you don't have other income.

Reply by a searcher
from Northwestern University in Fort Lauderdale, FL, USA

Go for it Ethan! If you have the means to focus on the search and not the W2 it is for the best to rid yourself of the w2 distractions. The bank knows you're serious when you're searching full-time, but like others said....it's all about the deal your pursing and not whether you currently have W2 income.

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