Debt financing (non-SBA) for $1m business under LOI

July 02, 2025

by a searcher from University of California, Berkeley in Los Angeles, CA, USA

I'm looking for debt financing for a smaller deal ($400k SDE; $1m price.) that's not SBA-eligible. I have the business under LOI but need to show proof of financing in the next 10 days. Anyone have any ideas or contacts willing to explore? I'd greatly appreciate it. The business is a stable B2B services firm that's been profitable for 7+ years. I'm happy to inject $100k, and am looking to finance the remaining $900k. I'm not interested in equity financing / partners. Debt only. Thanks so much!

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Alex, thank you for posting. The issue you are going to run into on a small deal like this is due to its size it is going to fall into the business banking group at most Banks. In the business banking group if a loan is not fully collateralized by hard business assets (equipment, A/R, inventory), then lenders likely will only do it with an SBA guarantee or they will not lend on it. The deal is just too small for most Banks to look at it from a conventional basis. If lenders were going to do it conventionally, they could not do it at 90% financing. 90% financing only exists in the SBA world. On the conventional banking side you are typically looking at maximum 50% to 65% of cost, so you would need to bring more equity to the table and would have a shorter loan term and amortization (5 to 7 years) than you would with an SBA loan. If you can bring the additional cash down and the cash flow works with a shorter amortization, then you might have a shot to doing something conventionally, but due to the deal size there are still going to be a really limited number of lenders that will look at it. Non-bank lenders are likely not an option due to the small deal size. I would be happy to have a discussion and go through non-SBA financing options, but I just want to be up front about some of the limitations that exist in the market for these smaller transactions. You can reach me here or directly at redacted

Reply by a searcher
from California State Polytechnic University, Pomona in Lake Forest, CA, USA

A few quick thoughts for you, ^redacted‌ —might be worth reaching out to Live Oak Bank to see if they’d consider funding based on cash flow. You could also explore 401(k) ROBS, asset-based lenders, or a strong seller financing structure. I’m sure others in the community will have additional ideas, but hopefully this gives you a few options to consider in the meantime.

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