Buying a business doesn’t always require writing a huge upfront equity check. With the right capital structure, buyers can leverage bank loans, mezzanine finance, and seller notes to fund most of the purchase price. The equity contribution still matters — but it can be smaller than many expect, especially when the seller and lenders believe in the continuity of the business.
Commercial banks are typically willing to lend between 40% and 65% of the enterprise value of a business, depending on cash flow stability and collateral. In the U.S., SBA 7(a) loans can cover up to 70–80% of a purchase price for smaller businesses, with extended amortization. For larger deals, leveraged buyout (LBO) structures often combine revolving credit facilities, term loans, and asset-based lending tied to receivables and inventory.
Many acquisitions involve the seller leaving part of the purchase price in the business as a seller note. This can represent 10% to 30% of the deal value, subordinated to senior bank debt but often accruing interest. Seller financing aligns incentives, keeps the vendor invested in the buyer’s success, and reduces the buyer’s immediate equity requirement.
The gap between what banks will lend and the total purchase price can be filled by mezzanine capital. Mezzanine lenders provide subordinated debt or preferred equity, usually priced at 12%–20% IRR. In exchange, they may receive warrants or equity kickers. This layer is flexible: it allows buyers to close deals without injecting large amounts of personal cash, but it comes at a higher cost of capital.
Even in highly leveraged deals, lenders want to see the buyer put some skin in the game. Typical sponsor equity is 10%–20% of the purchase price. For smaller buyers, this equity can be raised from private investors, family offices, or through search fund structures. In some cases, rolled equity from management or existing minority shareholders reduces the cash outlay further.
| Layer | Typical Share | Notes |
|---|---|---|
| Senior Bank Debt | 50% – 60% | Term loans, revolvers, SBA 7(a) loans |
| Seller Note | 10% – 30% | Deferred payment, interest-bearing |
| Mezzanine Finance | 10% – 20% | High yield, often with warrants |
| Sponsor Equity | 10% – 20% | Cash equity, rolled management equity |
Financely helps buyers line up bank debt, mezzanine capital, and investor equity to close acquisitions with minimal upfront cash.
Contact UsFinancely is an advisory and placement firm. We are not a lender or issuer. All financings are subject to credit approval, due diligence, and executed documentation. Actual leverage levels vary depending on industry, cash flow, collateral, and sponsor profile.
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Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.
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Submit a RequestOnce we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.
Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
Services are strictly business-to-business. Financely does not provide personal finance, consumer credit, or retail advisory services.
Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagements may be carried out through Financely Group LLC, a non-deposit-taking, non-banking financial company; Ashford Capital Advisory LLC; or another related entity.
Financely and its affiliates are not registered as securities broker-dealers and do not execute securities transactions or hold client funds or securities. When a mandate involves the purchase or sale of securities and a registered intermediary is required, any orders are introduced to and executed by one or more independent U.S. broker-dealers registered with the SEC and FINRA. Those broker-dealers are solely responsible for trade execution, custody, and related regulatory obligations. Nothing in this material constitutes an offer, solicitation, or recommendation to buy or sell any security or to engage in any specific transaction. Before engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate, you are responsible for confirming that such engagement complies with your own legal, regulatory, tax, and other requirements. In the United States, certain advisory activities may be conducted in reliance on exemptions available under the Investment Advisers Act of 1940, including the “foreign private adviser” exemption where applicable. Our services and regulatory status may vary by jurisdiction and by transaction type.
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