Debt Financing for Small Technology Company Acquisition

May 25, 2023

by an investor from University of California, San Diego in San Diego, CA, USA

I work as an executive at a small-medium size niche technology company considering a standard SBA7A type acquisition outside of my industry where I provided most of the equity, with maybe some small minority investors. Now I am considering a larger company in my industry. The company is around $3M in EBITDA and growing fast, so probably looking at a 4-6x multiple.

Can anyone point me to resources on how to find the debt for a deal like this?
- who do I talk to for debt financing?
- What kind of terms are typical for this debt?
- How much equity is typically required?

For the equity portion, I expect to put in around $2-300k and raise the rest from limited partners with a typical preferred return and common equity. Any advice on the details (preferred rate of return, equity share at the end) would be appreciated.

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

I would be happy to jump on a call to discuss financing options for you. We are a Commercial Loan Brokerage Shop with over 500 funding partners and we do both SBA 7A financing as well as conventional and alternative financing for business acquisition deals. You can ping me directly at redacted or here. Thank you.

Reply by a searcher
from University of Minnesota in Marysville, WA, USA

Congrats! I was just talking to a lender recently who provides debt financing for deals above $5M, which yours definitely would be. Happy to make a connection if that's of interest! Feel free to email me at redacted or message me here.

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