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Business acquisition financing solutions

Every acquisition has a different mix of cash flow, buyer liquidity, seller flexibility and lender constraints. We start with the deal and then determine the financing route — not the other way around. That may mean conventional bank financing, SBA financing, private credit, seller financing, outside equity or several sources working together.

Start with the full funding requirement, the buyer’s available capital and the earnings that can support repayment. Then compare the financing routes that fit those facts.

Have a target but no settled financing plan? A preliminary financing review can identify plausible routes, missing evidence and terms that need lender confirmation. The fit considerations below describe Duneland’s screening approach, not universal lender approval rules.

01

Conventional financing

Conventional bank financing can work well when the business has clean, supportable cash flow and the buyer has sufficient equity and liquidity.

We review the deal first, then take it to banks and other senior lenders whose current appetite fits the business, the buyer and the structure.

Discuss conventional financing
Senior debt70%
Seller note10%
Buyer equity20%

Tends to suit

  • The business has stable, documented cash flow over several years.
  • The buyer has strong personal credit and verifiable liquidity.
  • The seller will carry part of the price, or the buyer brings meaningful equity.

Issues to resolve

  • Revenue concentration or unsupported earnings adjustments leave repayment risk the lender will not accept.
  • The structure needs more leverage than the lender’s advance rate allows.
  • The buyer has no liquidity beyond the equity contribution.

02

SBA financing

SBA-backed financing can be attractive when the buyer, business and deal structure meet current program requirements.

We check eligibility early, structure the deal to fit the program and take qualified deals to experienced SBA lenders.

Discuss SBA financing
Senior debt80%
Seller note10%
Buyer equity10%

Tends to suit

  • The business meets SBA size and eligibility rules.
  • Individual owners meet current citizenship and residency rules; entity ownership and required guarantors also need review.
  • The transaction can satisfy the applicable equity, repayment, valuation and diligence requirements.

Issues to resolve

  • The seller will not accept an SBA-contingent offer.
  • Any direct or indirect individual owner is neither a US citizen nor a US national. Lawful permanent residence alone does not meet the ownership rule.
  • The structure includes terms the program does not permit.

03

Private credit

Private credit can make sense when an acquisition is larger, more complex or does not fit conventional bank underwriting.

We work with private credit funds and other institutional lenders across a range of deal sizes and industries.

See the company-reported entertainment-business private-credit case for one example of a term facility with interest-only payments. Its terms and refinancing assumptions describe that transaction, not an offer for another buyer.

Discuss private credit
Senior debt65%
Seller note10%
Buyer equity25%

Tends to suit

  • The business is of a scale and quality that institutional lenders underwrite.
  • The buyer or sponsor has operated or acquired businesses of comparable size.
  • The proposed terms require a capital provider with a mandate that differs from the banks considered.

Issues to resolve

  • The business is too small for institutional capital to underwrite economically.
  • The buyer’s operating plan and experience do not meet the provider’s underwriting requirements.
  • The lowest available rate matters more than structural flexibility.

04

Structured capital

Some acquisitions need more than one source of capital.

We can combine senior debt with seller financing, subordinated debt, private credit and/or outside equity when one source alone cannot bridge the gap.

Discuss your capital structure
Senior debt55%
Seller note20%
Buyer equity25%

Tends to suit

  • The senior lender will not cover the full gap between price and equity.
  • The seller is willing to carry a note, or to roll part of the equity.
  • Outside equity or subordinated debt is available, or can be raised.

Issues to resolve

  • The business cannot service the combined debt, whatever its layers.
  • The parties will not accept the intercreditor terms a layered structure requires.

The bars are illustrative. Equity, leverage and structure vary by lender and by deal; the proportions show how each route can divide a purchase, not what any lender has offered.

Funding the equity

Buyer liquidity before an LOI

Some buyers have the net worth or credit capacity to support an acquisition but do not have the entire equity requirement sitting in cash.

Where appropriate, we can explore liquidity options before an LOI so the buyer understands what capital may be available and can present stronger proof of funds.

Any additional borrowing still has to work within the acquisition lender’s underwriting.

Tends to suit

  • The buyer is still searching and wants to show proof of funds.
  • Equity, not senior debt, is the binding constraint.
  • The buyer has assets or credit capacity that are not yet liquid.

Issues to resolve

  • The buyer already holds the full equity contribution in cash.
  • The buyer intends to service the facilities from the acquired business on day one.
  • The additional personal debt would fail the senior lender’s own credit test.
Discuss buyer liquidity

Additional financing capabilities

Financing beyond the acquisition

Acquisition financing is our core focus, but the same relationships can support other business financing needs before, during or after a transaction.

Discuss a financing need

How should you choose between financing proposals?

Compare the same project and earnings assumptions across each proposal. Look at total buyer cash, payments on every debt, amortization, maturity, guarantees, collateral, covenants and investor rights. A lower rate does not establish a lower cash requirement or a more workable structure.

SBA financing has program requirements as well as lender underwriting. The SBA’s 7(a) overview describes eligible uses, repayment ability and lender-led applications. Our current acquisition-policy guide explains the relevant SOP provisions and exceptions. For the economic comparison, use the capital-stack guide.

What happens before an engagement?

Fees are transaction-specific and are outlined upfront, before an engagement begins. The engagement agreement explains the advisory fees, when they are earned and any third-party costs.

Lender fees, appraisals, legal expenses and other third-party costs are separate and are not Duneland fees.

Start with a nonconfidential target summary, available earnings, buyer resources and proposed terms. Agree the review scope and private document process with the team. See how the financing process works and anonymized transaction examples.

Brokers who need a buyer can explore current buyer criteria. Brokers who already have a transaction can use our broker hub to prepare a structure-review enquiry. Duneland coordinates buyer introductions.

Estimate funding needs and debt payments, and screen selected SBA criteria using your own assumptions. These are planning tools, not lender quotes or approval decisions.

  • Capital stackHow does the whole purchase get funded?
  • DSCRCan the target’s cash flow cover the debt?
  • SBA eligibilityDoes this deal fit the SBA program, or does it need another route?

All acquisition financing tools

The detail behind each solution

How the sources in a capital stack interact, what the SBA route asks, and the alternatives when it does not fit.

Buying without an SBA loan? The guide to non-SBA business acquisition loans covers who qualifies, the equity involved and what actually moves a closing date.

Have a deal in front of you?

Whether you have a signed LOI, are preparing an offer or are still evaluating the opportunity, send us the basic numbers and where you are in the process. We’ll look at the business, buyer and proposed structure and determine what the financing path may look like. No deal yet? Tell us what you are exploring, and we’ll show you the financing paths that may fit.

Talk to our teamExplore financing solutions