Non-SBA debt sub $5M

May 18, 2025

by a searcher from Villanova University in Miami, FL, USA

Hi all I’m currently looking to submit an LOI, in the next few days, on a food manufacturing business in Florida that has ~$5M revenue and ~$900k of EBITDA. To bridge valuation gap I plan to offer an earn out so sba is not an option. I’ve seen this asked on searchfunder a couple years ago but haven’t seen anything recent. Do any of you know of non-SBA lenders that will do $2M loan with no PG? The capital stack would be 50-60% debt, 20-25% seller note and the balance is equity. Equity would be from me, the sponsor, and some equity raised from investors. Any suggestions would be helpful prior to submitting an LOI. Thank you all!

Reply by an intermediary
from Clemson University in Raleigh, NC, USA

SBA is an option. It's just not called an earn-out. It's called a seller-forgivable note. I did the first one in the industry ~8 years ago. You are going to have a very difficult time finding a commercial lender that will not require an SBA guarantee.

Reply by a professional
from University of Michigan in Detroit, MI, USA

Hi ^redacted‌, when it comes to financing, I always recommend talking to ^redacted‌ or ^redacted‌. When it comes to the earnout, have you thought about a forgivable seller note? There are differences between the two structures, but a forgivable note acts much like an earnout (and yet is SBA compliant)? Let me know if you want to discuss the legal side of your deal in greater depth. Always happy to talk deals. Feel free to reach out at redacted

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