Structuring deals with junior partners staying on

by a searcher from Pennsylvania State University

2 years ago

Hi everyone, has anyone had experience structuring a deal to purchase a majority shareholder out from a business, while a junior partner or two would like to stay on on retain their equity? Using debt to buy a majority of the biz will obviously lower cash flow to owners, so I'm curious if people have had luck financing deals like this, and if there are any creative structures out there that can create a win for the buyer and win for the legacy partners.

Thanks,
Shawn

1 like
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5 comments

intermediary from The University of Chicago - Booth School of Business

I am assuming a) You do not mean "rollover equity". "Retained Equity" is different than "Rollover Equity", and b) You plan to use new bank debt.
What you are proposing cannot be done (SBA or non-SBA, small or large).
I am suprised with other answers. I hope I have not misread your question.

2 years ago | like reply | 0 likes

searcher from Gustavus Adolphus College

This is an eligible purpose under SBA 7a. In addition, you could possibly qualify for 100% financing.

2 years ago | like reply | 0 likes

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