Buying an existing business is the most leveraged legal wealth move available to an operator: the target's own cash flow services the debt that buys it. A repair shop netting $180K can be bought with ~$50-100K down, financed across 10 years, and pay for itself while paying you. The catch is that lenders know exactly how this works - and underwrite accordingly.
The standard acquisition stack
A $600K shop acquisition might look like: $420K SBA, $90K seller note, $90K down - with a $50K line opened at closing for the transition quarter. Total monthly debt service around $6K against the shop's $15K net: the deal breathes.
| Layer | Typical share | Notes |
|---|---|---|
| SBA 7(a) or term loan | 60-80% | 10-year terms; the workhorse of small acquisitions |
| Seller note | 10-20% | Standby note - also the seller's vote of confidence |
| Your equity injection | 10-15% | SBA generally wants real skin in |
| Working capital facility | Separate | Never buy a business and arrive broke to run it |
Read the target like the lender will
- SDE quality: how much of 'seller's discretionary earnings' is real vs. add-back creativity? Lenders recompute it; so should you.
- Customer concentration: one fleet account at 45% of revenue is a risk you're buying - price it in or contract it up.
- What leaves with the seller: relationships, certifications, the license the whole model rests on. Transition terms belong in the purchase agreement.
- Equipment reality: that 'included' lift list at book value - inspect it like you're buying it, because you are.
The seller note is your alignment tool
A seller carrying 15% on standby has 15% worth of reasons to make the transition succeed - introductions made, quirks explained, phone answered in month three. All-cash exits walk away clean. Negotiate the note even when you don't need the money.
60-Second Funding Check
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Acquisition-fluent partners
From LOI to closing, Dealerun routes acquisition deals to SBA-preferred lenders and structures the working capital that makes month one survivable. Automotive, transport and equipment-business acquisitions are exactly our lane.
Finance the acquisition
Target in mind? Get the structure and real numbers before the LOI.
FAQ
How much down payment do I need to buy a business?+
SBA-financed deals: typically 10-15% from you, sometimes partially covered by a seller note on standby. A $500K acquisition realistically wants $50-75K of your capital plus closing costs and a working capital cushion.
Can I buy a business with bad personal credit?+
SBA routes get hard below ~650. Alternatives: bigger seller financing (sellers underwrite trust, not FICO), asset-based structures against the target's equipment, or a creditworthy partner. Fix what's fixable first - acquisition debt is cheap only when your file is clean.
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