Deal Structuring without SBA financing

March 01, 2026

by a searcher from University of Texas at Arlington in Chattanooga, TN, USA

Hi everyone, looking for perspectives on structuring acquisitions without SBA financing, particularly for smaller manufacturing deals. I’m currently pursuing the acquisition of a small U.S.based manufacturing business in the ~$400k–$700k purchase price range (approximately $100k–$200k EBITDA). While SBA loans are commonly discussed for deals of this size, I’m exploring alternative financing structures where SBA approval may not be feasible. For those who have completed or advised on non-SBA transactions in this lower-middle-market range: • What capital structures have you seen work well without SBA debt? • How common is seller financing as the primary funding source, and what terms tend to align incentives effectively? • Have buyers successfully combined smaller equity contributions with personal loans, investors, or revenue-based structures? • From a seller’s perspective, what structures increase confidence when traditional bank financing isn’t involved? • Any pitfalls or deal risks that first-time buyers often underestimate in non-SBA transactions? My goal is to understand realistic pathways that balance risk for both buyer and seller while keeping transactions financeable at smaller deal sizes. Appreciate any insights or examples from your experience. Thank you in advance!

Reply by a professional
from American University in Irvine, CA, USA

Thanks for the tag, ^redacted‌. Several of our clients have found traditional leveraged buyout (LBO) financing with local banks, if the combined assets post-acquisition have a sufficient asset base to support that type of loan. If you would like to discuss this further, happy to talk. DM me here.

Reply by an intermediary
from The Johns Hopkins University in Gainesville, FL, USA

Thanks ^redacted‌ for the tag. Searcher, you have a near infinite array of possibilities, but there are really only three buckets to work with: equity that you inject, debt from any source, and outside equity from any source. From a strictly finance perspective, you'll get the best ROI by maximizing debt, but DO NOT go beyond what the business can afford to service or you'll lose the company. Dial up the equity to reduce finance costs and provide leeway when the company doesn't perform as expected. Leaving some equity with the seller can both reduce financing costs and improve alignment. Dialing up outside equity, specifically friends and family for a deal this size, reduces your operating risks but increases your relationship risks. Lastly, make sure you clearly understand the needs and wants of the seller to ensure alignment, a critical factor to get from DD to closing.

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