SBA 7(a) loans are heavily marketed as the default choice for buying a business, but they are not the only path and not always the best fit. Larger transactions, foreign sponsors, roll ups, and time sensitive deals often run into SBA limits on size, structure, personal guarantees, or industry eligibility. When that happens, buyers need to understand what a non-SBA capital stack actually looks like instead of hoping a bank will stretch its policy.
SBA loans are designed around smaller, owner operated businesses. Once you move into professional sponsor territory, search funds, or buy and build platforms, the program rules start to get in the way. Common friction points include mandatory personal guarantees, change of control restrictions, limits on foreign ownership, and conservative views on roll up strategies or add ons that rely on heavy leverage.
There is also a practical size issue. A sponsor trying to close a series of acquisitions in the 5 million to 50 million enterprise value range rarely wants to run each deal through a slow, form driven SBA process. They start to look for non-SBA structures that can scale, support multiple deals, or sit at the holding company level instead of being tied to a single operating subsidiary.
Outside SBA, lenders focus less on templates and more on cash flow, collateral, and sponsor credibility. The capital stack usually starts with a senior facility and then layers in additional instruments only if the earnings profile and equity cushion justify it.
A senior term loan or unitranche facility is often the anchor piece. Pricing sits above SBA but below mezzanine or equity returns. Lenders underwrite against normalized EBITDA and want to see comfortable coverage ratios, realistic add back assumptions, and a clear plan for integration and growth.
These structures can support higher enterprise values than SBA loans, provided you accept tighter covenants, more reporting, and less aggressive leverage than some brokers promise in marketing conversations.
In asset heavy acquisitions, an asset based facility secured on receivables, inventory, or machinery can release additional liquidity. This does not usually fund the full purchase price on day one, but it helps support higher overall leverage once the borrowing base is in place.
Buyers often combine a senior term loan for the acquisition with an asset based revolver for ongoing working capital, seasonal swings, and future bolt on deals.
Vendor financing is not a courtesy, it is a pricing and risk sharing tool. A seller note, structured on subordinated terms, can close the gap between what the buyer can fund through senior debt and equity and what the seller believes the business is worth.
Earn outs and contingent payments tie part of the price to post closing performance. Lenders will want to see the detail here, since aggressive earn out obligations can drain future cash flow.
Mezzanine lenders and preferred equity providers sit between senior debt and common equity. They expect higher returns, often through a mix of cash interest, payment in kind interest, warrants, or preferred distributions.
This layer only makes sense when the business has strong, durable earnings and the sponsor brings enough equity to keep overall leverage reasonable. If the entire deal depends on mezzanine funding to reach a stretched valuation, the answer is usually no.
Buyers hear a lot of optimistic talk about “up to 90 percent financing”. In practice, sustainable leverage for non-SBA acquisition deals tends to sit in a narrower band. Senior lenders focus on debt service coverage, resilience under stress cases, and the quality of earnings, not on the highest possible loan to value that a broker can pitch.
If your model only works at the very top of the leverage range, expect pushback. Serious lenders prefer a structure that still makes sense if margins compress, integration takes longer, or one large customer is lost. That discipline is not a preference, it is how they stay in business.
Non-SBA lenders do not hide what they care about. Their credit committees look at a fairly consistent set of questions and they expect buyers to have thoughtful answers backed by data, not just a confident narrative.
Many buyers reach out after speaking with brokers who promise high leverage on vague terms. Once real lenders review the file, the feedback is very different. Our role is to work on the structure, documentation, and lender panel so that you approach the market with a credible package instead of guesswork.
We focus on transactions where there is a signed or near final letter of intent or asset purchase agreement, reliable financials, and sponsors prepared to commit meaningful equity. For those mandates, we help map the likely capital stack, introduce suitable senior and subordinated lenders, and coordinate the process through to term sheets and closing, working with regulated partners where local rules require it.
If your expectations on leverage or pricing are unrealistic, or if the fundamental materials are not ready, we say so plainly. That honesty saves time, protects relationships with serious lenders, and helps sponsors focus on deals that actually have a path to funding.
Share your LOI or APA, last three years of financials with interim numbers, a brief sponsor profile, and your planned equity contribution. We will assess whether a non-SBA structure is realistic and outline likely senior and subordinated options for your deal.
Explore Non-SBA Acquisition FinancingWe act as arranger and advisor through regulated partners. Where lending or securities activity requires registration, activity is carried out by or through appropriately licensed firms in the relevant jurisdictions. Nothing in this article is an offer to lend or a commitment to provide financing. Any mandate is subject to KYC, AML, sanctions screening, full credit approval by funding counterparties, and formal written agreements that define scope, territories, and fees.
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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.
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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.
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