I am 6mo in to operating my first acquisition. How do I fund the next deal?

searcher profile

December 30, 2024

by a searcher in Denver, Colorado, USA

As owner/operator of my first acquisition, a 5 employee, primarily seller financed business in Denver, I am beginning to look for the next business deal. My initial plan is to build up my balance sheet for a year or so, and then start submitting LOI's. But if I came across another deal within the next 6-12 mo, what are my options for accessing SBA lending towards a next $1.5m-$2m business if I only have $50k-$100k of cash/personal assets? I am open to bringing on investors/partners, but I'm mostly unfamiliar with the way the personal guarantees would work. Do I need to have a certain amount of assets even if I raise private equity? Thanks in advance.

0
4
52
Replies
4
commentor profile
Reply by a searcher
from University of Georgia in Atlanta, GA, USA
^redacted‌, normally the SBA requires you to fund at least 10% of the deal (the max they will fund is 90%), but as Jason Grant said, that's not always required. Just because your personal assets are only $50k-100k doesn't stop you from getting an SBA loan. I've seen people in similar situations get SBA loans in the past. Talking to lenders would help. The SBA will require a personal guarantee, which means you are on the hook and could end up in the bankruptcy process if the business goes under.

For investors, they will be focused on the fundamentals of the business, not your assets. I don't expect they will care about your assets outside of how that will enable you to run and grow the business.
commentor profile
Reply by a lender
from University of Southern California in Los Angeles, CA, USA
Just helped a borrower get a SBA loan with 1% down and 10% seller note. For structures like this be ready to pay the top end of the range in terms of interest rate - prime +2.5%. Would love to help you with your SBA loan. We work with all the major SBA lenders. The bank pay us after your loan closes, so this is a 100% free service for you. You can reach me here or directly at redacted You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!
commentor profile
+2 more replies.
Join the discussion