No Money Down Deals

by a professional from University of Michigan - Ann Arbor

7 months ago

I've met with a number of self-funded searchers recently who are looking for no money down deals--deals in which the entire purchase price is covered by a combination of SBA debt and seller financing.

This deal structure is often promoted by social media influencers who (conveniently) also sell courses on how to pull it off.

Everyone I know and trust in the lending space tells me a no money down deal is a no go in the current economic climate--searchers have to bring at least 5% to the table, whether from personal funds or investors.

But I thought I'd ask the community. Who's pursuing a no money down deal? Any luck? What's been your experience?

I would also love to hear from lenders. Please share your thoughts!

3 likes
129 views
15 comments

searcher from Babson College

Most of the SBA lenders I have spoken to require at least a 5% equity injection and 5% seller financing to get to the 10%. The exception is if an employee that has been an integral part of the company buys out the current owner then the lender will consider 0% equity and 10% seller financing.

2 months ago | like reply | 0 likes

searcher from University of California, Berkeley - Haas School of Business

I'm seeing lots of posts about zero money down. Great info from those tagged in the comments. My takeaway is that it's possible when the right lender and borrower align and structure the deal creatively.

3 months ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Downsides of "buying a job" below 750k+ EBITDA?

Thought piece: Proprietary sourcing methods that delivered 2 acquisitions

6-7x for a Self-funded Search Deal?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.