1) Small Business Loan (SBA Loan)
- File an application for an SBA loan to receive a lower rate from the bank
- Combine your personal funds with an SBA loan to cover the total amount
2) Seller Financing
- Get funding from the seller instead of a financial institution
3) Bank Loan
- Consider a conventional bank loan, when entering any RE-related areas. The bank will generally require substantial physical assets as collateral for the loan
4) Crowdfunding & P2P Loans
- Connect with lenders/investors through third-party online intermediaries
- Get equity-based or reward-based crowdfunding
5) Equity Injection
- Get a cash injection toward the down payment for a percentage of ownership in the company, either as straight equity or convertible or something between
- possible sources: family & friends, Family Offices, Venture Capital, (Micro) Private Equity
6) Earn Out and Holdbacks
- Don’t pay 100% upfront, leverage the power of performance-based structures (like EO) or holdbacks
- The acquired business will subsidize or even completely pay these down the road
7) Roll-over
- Often, sellers are intrigued to hold onto a minority share in their company, typically ranging from 5-20%
- Means you only have to pay for the remaining part upfront
Don’t let financing hold you back from buying the business of your dreams. Make it happen! 💰