We help entrepreneurs and business owners finance their small business acquisitions. Our specialty is funding transactions valued between $700,000 and $5,000,000. We can handle large transactions in select cases.

We can work with buyers who have:

1. A Letter of Intent (LOI) or are about to submit one

The reason for this requirement is that without an LOI, there is nothing for us to offer. To provide you with the information that you need, we must know specific information that is outlined in the LOI. This includes information about specific amounts, terms, and timeframes of the transaction.

In our experience, evaluating an opportunity without an LOI leads to unproductive speculation. Ultimately, it consumes a lot of time and does not produce tangible results.

Well-crafted letters of intent often include a contingency clause that states that the offer is conditional on obtaining financing (among other things). This clause should provide you with the opportunity to look for the right financing for the transaction. A word of caution: when crafting an offer, consider consulting with an attorney who specializes in acquisitions.

2. Industry experience (or can hire a manager)

As a general rule, we work with individuals who have experience managing the type of business that they are looking to acquire. However, we understand that not everyone can meet this requirement. If you don’t have enough experience yet, we are happy to work with you as long as you hire a manager from the existing business for a period of time.

3. The ability to contribute 10% to the transaction

All transactions require that the buyers contribute 10% of the acquisition value. This contribution is often referred to as the buyer’s equity injection.

These funds must come from your own sources and cannot come from loans or owner financing. Many clients use personal savings or investments to fund this component.

In some cases, the buyer’s contribution can be reduced to 5%. However, this can be done only if the seller provides at least 5% of financing and if they agree to a standstill on that financing for the life of the loan. In our experience, getting a seller to agree to a standstill is difficult.

Note: Buyers often ask if we offer 100% financing. Unfortunately, we don’t. We are not familiar with any company that provides 100% financing in our market segment. We are aware of some providers that state they can offer 100% financing; however, they seem to have large upfront fees and don’t offer any guarantee of success.

4. A personal credit score of 650 or more

Buyers must have a minimum credit score of 650. All lenders look at this information because personal credit serves as a proxy (albeit imperfect) for how a potential buyer will manage their business’s financial affairs.