Non-SBA financing Options?

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January 30, 2019

by a searcher from The University of Michigan - Stephen M. Ross School of Business in West Bloomfield Township, MI, USA

Working on a deal for multiple tutoring centers with consistent EBIDTA over the last 10 years. I want to take a look at alternatives to SBA funding? Any insight into banks that would offer other funding alternatives? Thanks!

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Reply by a searcher
from University of Pennsylvania in Chicago, IL, USA
Chris, I would second Colin's response. From my experience, cash flow based lending is really tough to find with small business, especially if you are looking to avoid the PG. Real estate can help a lot, especially if it is possible to combine the debt financing for the business with acquisition of the real estate as well. The more equity you put in the easier it will be to use non-SBA loans. SBA enables much higher leverage, which is a good thing or a bad thing, depending on one's perspective.
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Reply by an investor
from University of Notre Dame in Pittsburgh, PA, USA
Chris, depends on the size/EBTDA of the business. cash flow lending is what Tecum does. For smaller deals below our threshold we tend to find more "local" banks to be the most flexible. The trouble is if the local bank has 20 lenders only 1 might have any clue what a search fund is or real "buyout deal" experience so finding the right person via your network is key. Happy to help point you in the right direction if you want to reach out.
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