Looking to acquire my first business and need help.

Hi everyone!

Currently looking to transition from my 9-5 by acquiring a business. I'm looking at several options and industries and have identified some potential businesses in the $3-5MM range that net $0.8-1.5M.

I can muster up between $300-500K in cash for a down payment and was considering going the Sba route. Is there a way to go about this while still protecting my personal assets? Also, any good alternate recommendations for funding?

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Just curious, did you check the ebitda on those potential businesses?

You could always find an investor to partner with you, if it’s a scalable business.

Acquisition financing is tough. Most viable funding option for you is debt financing

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Depends. Are you doing this through a search fund or self funded currently?

SBA 7(a) loan

I would try to maximize a seller note and throw in an earnout if your can, which is a decent option in todays market where things may be a little slow in the business your buying

I’ve seen seller notes become much more prevalent in the last 6-9 months. Seller notes are starting to represent a larger share of the total PP (often reducing the SBA loan amount at closing). A number of buyers have included a 2nd seller note that is partially or fully forgiveable based on performance metrics (which is often used as an earnout substitute when you also have an SBA loan).

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Would you consider becoming an investor with equity?

Some businesses might have owner financing available. And sometimes part of that package is training under the current leadership to move forward.

It’s certainly market to include some sort of seller transition training (usually up to 6 months, sometimes a year) as part of the purchase price. A lot of buyers don’t want the seller actively involved for more than 90 days or so but ask the seller to be available on an as needed basis after that for ~ 6 months

What types of industries/businesses have you looked into?

Bad idea.

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