Acquiring a business can take many forms, including partial acquisitions, which are now eligible for SBA financing. A partial business acquisition usually involves purchasing a majority stake in an existing business rather than the entire company. It allows buyers to leverage existing infrastructure, licensure, clientele, and market and requires only a 5% equity injection – half the SBA requirement for a full buyout. This is proving to be a great solution for sellers who want to transfer ownership to their current non-owner employees.
At FNB Small Business Finance, we help facilitate partial business acquisitions through SBA lending solutions that give business owners the flexibility they need. An SBA loan for a partial buyout acquisition can offer up to a 10-year term.
A typical acquisition structure typically looks like this:
- New buyer purchases 80%+ of the business and the seller retains <20% with no personal guarantee required
- The seller will stay on as an owner post-transaction
- Only 5% equity injection required
- If current manager – 2.5% buyer, 2.5% Seller Note
As many sellers are looking for exit plans to retirement and buyers want to retain the relationship with the seller to ensure a successful transition, a partial buyout is a great way to accomplish both goals. Reach out to our team of experienced Business Development Officers today to learn more!
