Most business buyers underestimate how important working capital planning is

Most business buyers underestimate how important working capital planning is — until they’re deep into diligence or scrambling to close. If you’re heading into an LOI, now is the time to think seriously about how you’re going to fund the working capital needs of the business post-close. Here are a few paths I often see work: - Built into the purchase price – This involves negotiating a net working capital “peg” with the seller, either in the LOI or later in diligence. The goal is to ensure there’s enough working capital left in the business for you to operate from day one. - Financed through your SBA 7(a) loan – You’ll need to clearly explain in your business plan why the working capital is needed, but it’s a valid and common option. - Securing an SBA Express Line of Credit – Especially useful for seasonal businesses. These typically come with a 3-year revolving period and can provide solid flexibility as you navigate ramp-up periods or cash flow gaps. If you're in the process of buying a small to medium-sized business—especially one in a smaller market—and you're getting close to submitting an LOI, let's talk. Our team at Pioneer Capital Advisory LLC helps buyers structure financing with working capital in mind so you're not caught off guard later. Feel free to send me a message—happy to walk you through options that match your deal. email: redacted