Does anyone have experience structuring a roll-up to utilize each partner's maximum SBA loan limit?

searcher profile

June 17, 2025

by a searcher from University of Pennsylvania - The Wharton School in New York, New York, United States

With two partners, is there a way to structure acquisition unit deals such that you can utilize $10M across the partners? For instance, each partner owns individual units and then you have those profits roll into a TopCo that redistributes the profits accordingly?
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commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Well done ^redacted‌ not much to add except maybe that Lenders can’t look at consolidated performance for debt service. As stated by Sean each partner has to stand on his/her own and then so does each company. Can’t use the strength of the holdco for DSC and ‘get around’ SBA rules. A true roll-up is a better conventional financing strategy long-term.
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Reply by a lender
from University of Missouri in Denver, CO, USA
Yes, this is possible. Unit A HoldCo would be owned 100% by partner A. Unit B HoldCo would be owned 100% by partner B. The TopCo holds these two holding companies. Keep in mind, each HoldCo cannot mix ownership or control. I would recommend keeping separate financials for each. Last, the TopCo must not control the operating of the holding companies. Even with this above, it can be complicated to draft the right partnership and operating agreements as mentioned above, as well as each partner must be strong enough individually to take down a $5mm loan without the other partner.
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