SBA Financing for Partial AcquisitionsThis post explores using SBA 7(a) loans to acquire 88% of a company, with the seller retaining a minority stake. Bruce Marks states, "So there you have it, a stock sale for the purchase of 88% of an existing business, funded by an SBA Loan," demonstrating its feasibility.Synergistic AcquisitionThe deal aims to create a stronger combined business through:Operational Synergies: Cost savings and process efficienciesStrategic Synergies: Market expansion and competitive positioningFinancial Synergies: Improved profitability and cash flowDeal Structure & Seller FinancingEquity Injection: $1,100,000Seller Notes: $4,000,000 (39% of the deal) – critical to making the deal workSBA Loan: $5,000,000 + $700,000 Pari Passu LoanContingent Seller Notes vs. Earn-outs"SBA does NOT allow for 'earn-outs' but does allow for 'Contingent' Seller Notes," ensuring compliance.Valuation & Sale The buyer paid 6x EBITDA ($2M avg. past 3 years)—a standard multiple in the insurance industry. While this was a stock sale, Neal Patel notes that asset sales can also facilitate equity rollovers.Personal Guarantees & Equity ConcernsNo PG required if seller owns <20% post-close (Patel)The seller’s 12% stake (~$1.5M value) vs. buyer’s 88% ($1.1M) often causes deal friction (Adhikari)ConclusionThis case study illustrates SBA-backed acquisitions with seller equity rollovers, highlighting structuring strategies, compliance considerations, and financial implications.Read that full post here: https://www.linkedin.com/posts/bruce-marks-mba-cmaa-7938b67_wssbruce-im-looking-to-acquire-88-of-activity-7282422490096660481-QTrR?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAB93fwBBqpG4EyWpoMTT0FThJ1EDPH5rg8DISCLAIMER: The BizNexus Roundup podcast features AI hosts whose analysis is based entirely on pattern recognition and reports created by actual human experts. While our hosts can process vast amounts of data, they've never actually closed a deal or sat in a boardroom.Our discussions draw from publicly available sources and expert insights, but we strongly encourage listeners to consult the original documents and reports referenced in each episode for the complete context and analysis. The AI hosts' market predictions and deal assessments, while data-driven, are no substitute for professional human judgment and due diligence.For actual M&A advice, please consult qualified human experts and always go to the source materials to get the full story.Learn More About BizNexus Schedule a Demo: https://www.biznexus.com/demoAccess our marketplace: https://www.biznexus.com/marketplace-homeAccess our community: https://community.biznexus.com/Learn more about OmniSource™: https://omnisource.ai/Follow us on LinkedIn: https://www.linkedin.com/company/biznexusGet an acquisition loan: https://biznexus.tech/acquisition-financing Show Credits Intro Music Artist: DJ Freedem | Track: Pretty Boy

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