Financing Tuck-ins After Hitting SBA Limits – What Are the Options?

April 15, 2025
by a searcher in New York, NY, USA
Hi all,
For those pursuing a roll-up strategy using SBA 7(a) loans: once you’ve maxed out the SBA debt, how do you typically debt finance tuck-in acquisitions beyond that point?
• Can you raise conventional senior debt behind the SBA loan?
• If so, what are typical terms for that conventional debt (interest rates, amortization, maturity, personal guarantees)?
• Which banks do this type of lending?
• I’ve heard some mention refinancing into all conventional debt once total debt reaches ~$10MM or EBITDA reaches $3 million. Is that the case? What's typical maximum leverage at that point?
• More broadly, how do folks generally finance M&A in that $5MM to $10MM debt range?
Would love to hear from those who’ve navigated this, especially anyone who has transitioned from SBA to conventional financing mid-rollup.
Thanks in advance.
from The University of Texas at Austin in Dallas, TX, USA
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA