Alternatives to SBA Financing with Seller Rollover Equity on a $2-3m Deal

searcher profile

June 04, 2025

by a searcher from University of Pennsylvania - The Wharton School in Philadelphia, PA, USA

We're exploring alternatives to SBA financing for a transaction with Seller rollover equity. We're seeking $1.6m of debt financing on a highly recurring revenue business valued between $2-3m. We initially started down the SBA route, but we want to avoid the PG for the seller since he is rolling some equity (less than 20%). Any recommendations on private credit firms, individual investors, etc. who might be interested in the deal? Posting anonymously since the deal is currently under LOI. Please comment if interested and I will message you directly and can share more info on the deal then. Separately, If anyone has done a deal with Seller agreeing to PG, would love to connect and hear any insights. Thank you!
1
6
96
Replies
6
commentor profile
Reply by a professional
from The University of Texas at Austin in Austin, TX, USA
Travis is the man, shoot him a note ^redacted‌
commentor profile
Reply by an intermediary
from The University of Chicago in Chicago, IL, USA
Is following an option? Need CPAs and lenders to chime in. a) SBA financing, b) Seller retains <20%, c) Seller gest cash ($X) for the 80+%, but is not considered "received" for tax purposes, d) Seller gives PG for 2 yrs, e) Seller puts the cash into a holding account till the PG is lifted such that he does not pay tax on $X till after the PG is lifted. f) Have RWI such that buyer does not increase debt, maintains certain equity, etc., so that if PG is not removed due to buyer performance or any other reason, the Seller gets the business back and the $X in the holding account automatically pays off the SBA debt. If above has some merit, then together we can tweak and refine it.
commentor profile
+4 more replies.
Join the discussion