A distribution business with low SDE/EBITDA to gross sales

Looking at a business (distributor) where the EBITDA is low (low 6 figures) vs sales (5~ 10m). I think the business is solid, just not run as fiscally tight as need to do a typical cash flow 7A loan. It is also a industry I already own an business in and am familiar with. This would be an expansion to another state through acquisition for me. So the questions are ... Deal structure:I'm think high seller note then refi in 2 years. Convention 7A cash flow loans aren't going to work. can i get other debt for this? What sort of investors would be interested in this, and what price? what other option are there and what else have others done?
Pluses: well established business, with leased facilities, customers, suppliers and employees. Gross profit is with in line with industry averageNegatives: AP is greater than current inventory and AR combined (both a point of caution and possible place for improvement). labor expenses is too high, also some other ancillary costs. basically all money, once taken by the owner, finds a home somewhere else.

Less looking for advice on the quality of the deal, than ways to make it work. I am open to cautions on what to watch out for and what are no-go red flags. Also what options are out there for funding it?

thanks