UNDERSTAND THE RIGHT CAPITAL STACK BEFORE YOU SUBMIT AN LOI

A GENERIC PRE-APPROVAL IS NOT DEAL APPROVAL

A general SBA pre-approval may indicate preliminary buying power, but it does not mean a lender will approve a specific acquisition.

Actual financeability depends on the buyer, business, purchase price, cash flow, proposed structure, equity contribution, working capital needs, seller financing, industry risk, post-close liquidity, and lender appetite.

The buyer and the deal need to be evaluated together before relying on a financing path.

WHAT WE HELP EVALUATE

• DEAL FINANCEABILITY
  
  Whether the purchase price, cash flow, add-backs, working capital needs, industry, and debt-service coverage appear supportable.
  
  
• BUYER + DEAL FIT
  
  Whether the buyer’s liquidity, credit, experience, operating role, equity contribution, and reserves align with the transaction.
  
  
• CAPITAL STACK
  
  How SBA, conventional non-SBA debt, private credit, seller financing, outside equity, earnouts, or a blended structure may work together.
  
  
• CASH REQUIRED TO CLOSE
  
  How much buyer cash may be required and whether seller financing, outside equity injection support, or another structure could reduce the buyer’s personal contribution.
  
  
• EXECUTION RISKS
  
  Potential lender concerns, structure issues, diligence needs, packaging requirements, and items that may need to be addressed before or after LOI.

CAPITAL OPTIONS MAY INCLUDE

• SBA and conventional bank financing
• Non-SBA debt and private credit
• Seller financing and earnouts
• Outside equity or family-office capital
• Equipment, working-capital, and revolving-credit facilities
• Blended capital structures
  
  

The right structure depends on the buyer, business, transaction size, cash flow, collateral, working capital needs, and seller terms.