Non-SBA Lender (w/ no PG) for $1m EBITDA deal

July 13, 2025

by a searcher from Queen's University in Miami, FL, USA

I have 2 deals very close to being under LOI with combined ~$1m of EBITDA for ~$5m. In each transaction the seller will be rolling ~20% equity and signing post close employment agreements. Without getting into too much detail.. these are businesses with physical locations and 2 locations just opened and are not reflected in EBITDA. I think mature/steady-state EBITDA is closer to $1.5m+. The businesses are in CA Given the seller equity roll, I think this deal is not eligible for SBA and I would also avoid like to avoid a PG. Does anyone know any lenders that might look at this? I personally would write a significant equity check into the deal (5-10% of purchase price)

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We are a Commercial Loan Brokerage Shop with direct lending relationships with over 500 funding partners, and we do conventional bank debt, SBA lending, and non-bank lending for acquisitions. I just want to be up front that there are going to be very limited options for conventional or non-bank debt without a personal guarantee. Just about every bank based on loan policy is going to require a personal guarantee on a transaction of this size. There are non-bank lenders that might not require one, but the debt is going to be significantly more expensive. But even if the non-bank world, your loan to cost at 70 to 75% is still high for non-recourse. Usually we see non-recourse closer to 50% loan-to-cost.

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

Hi ^redacted‌, I would consider reaching out to ^redacted‌ or ^redacted‌. Either may be able to help. But in general, unless the business has significant fixed assets, you may struggle to avoid a PG. As for the SBA, you could structure it to be SBA compliant (at least, based on the information you have provided). You'd have to change from a traditional rollover to the seller retaining equity (in a stock deal). And the seller would have to PG the loan for a couple of years. So perhaps this isn't workable. Happy to discuss further, if helpful. Reach out at redacted

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