You fund a US company acquisition by combining several capital sources into one stack — most often an SBA 7(a) or conventional term loan for the bulk of the purchase price, a seller note to bridge the gap, your own equity injection, and short-term revenue-based financing to cover the working-capital and integration costs that hit right after closing. No single product is designed to pay for an entire acquisition and its aftermath, so the operators who close cleanly plan the layers before they sign the LOI.
The purchase price is only part of the money you need. Deals also demand working capital to make payroll during the ownership handoff, inventory and deposits, transaction fees, and a reserve for the revenue dip that almost always follows a change of control. This guide walks through each layer, when to use it, and how revenue-based financing fills the fast-moving gaps that term lenders are too slow to reach.
Key takeaways
- Acquisition funding is a stack, not one loan: senior debt for the price, a seller note to bridge, your equity injection, and revenue-based financing for the post-close cash gap.
- SBA 7(a) loans fund US acquisitions up to $5 million and typically close in 60-90 days; they qualify mainly on the target's cash flow, not just your credit score.
- SBA 7(a) acquisitions generally require at least a 10% buyer equity injection, part of which can come from a seller note on full standby.
- Revenue-based / MCA marketplace financing qualifies on bank deposits and revenue (FICO 500+), starts around $10,000, and can fund in 24-48 hours.
- Buyers most often underestimate working capital: payroll during handoff, deposits, fees, and a reserve for the post-close revenue dip.
- Revenue-based financing is a short-duration bridge for the gap slow money leaves — not a tool for funding the entire purchase price.
- No legitimate funder guarantees approval; confirm all offer terms in writing before relying on the capital.
The acquisition capital stack: what each layer actually pays for
Think of acquisition funding as a stack, not a single loan. Each layer has a job, a cost, and a speed. The art is matching the source to the need.
- Senior acquisition debt (SBA 7(a) or conventional term loan) — the largest layer, used to pay the seller for the business itself. SBA 7(a) is the workhorse for deals up to $5 million because it allows long amortization and lower down payments. Conventional bank term loans suit larger balance sheets and asset-heavy targets.
- Seller financing (seller note) — the seller carries a portion of the price as a note you repay over time. It signals seller confidence, reduces the cash you must raise up front, and is often required by SBA lenders to be on full standby for part of the term.
- Equity injection — your own cash (or an investor's). SBA 7(a) acquisition deals generally require at least a 10% equity injection, and up to half of that can sometimes come from a standby seller note.
- Working capital and integration financing — the layer most buyers underestimate. This covers payroll during the transition, supplier deposits, marketing to retain customers, and the buffer for the post-close revenue dip. Revenue-based financing and lines of credit live here.
For a deeper walkthrough of the products in the bottom layer, see our complete guide to small-business funding options.
SBA 7(a): the default engine for US acquisitions under $5M
The SBA 7(a) program exists in large part to make business acquisitions financeable, and for most Main Street deals it is the first place to look. Loans go up to $5 million, terms for a business acquisition (goodwill-heavy, no real estate) commonly run up to 10 years, and the government guaranty lets banks say yes to deals they would otherwise decline.
The trade-offs are speed and paperwork. Expect the full process — LOI, business valuation, lender underwriting, SBA sign-off, and closing — to take roughly 60 to 90 days, sometimes longer. You will provide personal financial statements, a source-and-use of funds, tax returns for both you and the target, and a business plan or transition memo. Underwriters scrutinize the target's historical cash flow and debt-service coverage far more than your personal credit score. This is the cheapest large-dollar capital available to most buyers, but it is not fast, and it will not fund the post-close cash crunch on its own.
Seller notes and earnouts: the negotiating lever that closes deals
Seller financing does two things at once: it lowers the cash you must bring to the table and it keeps the seller invested in a smooth handoff. In a typical structure, the seller carries 10% to 25% of the purchase price as a promissory note repaid over three to seven years. An earnout ties part of the price to the business hitting agreed revenue or profit targets after you take over, which protects you if the numbers the seller showed you do not hold.
Two things to know as an operator. First, SBA lenders often require a portion of the seller note to be on full standby — meaning you make no payments to the seller for a set period — so it can count toward your equity injection. Second, a motivated seller note is a signal to every other lender in your stack that the person who knows the business best believes it will perform. Use that signal deliberately.
Where revenue-based financing fits: the working-capital gap
Here is the trap: the SBA loan pays the seller, your equity clears the down payment, and on day one you own a business with a drained cash position and a revenue dip coming. Payroll still runs. Suppliers still want deposits. A customer or two leaves during the transition. Term lenders have already closed their file and cannot re-open it for another 60 days.
This is exactly where a revenue-based / MCA marketplace earns its place in the stack. Approval is driven by the business's bank deposits and revenue rather than your personal credit, so it works when your FICO sits at 500 or above and your equity is tied up in the deal. Typical funding starts around $10,000, and because the file is thin — a few months of bank statements — money can be available in 24 to 48 hours. You repay from a share of daily or weekly sales, so the cost flexes with your cash flow instead of demanding a fixed payment before the acquired revenue has stabilized.
Used correctly, this is short-duration bridge capital: cover the integration months, retain the customers, then let the business's stabilized cash flow carry the senior debt. It is not a substitute for the SBA layer, and it is never guaranteed approval — it is the fast, revenue-qualified patch for the gap the slow money leaves behind.
Decision framework: when each source works best — and when to avoid it
Match the source to the situation. The wrong tool in the wrong layer is how buyers end up cash-starved 60 days after closing.
SBA 7(a) works best when the deal is under $5M, the target has clean tax returns and provable cash flow, and you can wait 60-90 days to close. Avoid when the seller needs to close in weeks, the target's books are too messy to document, or the business is asset-light with no verifiable earnings history.
Seller financing works best when the seller is retiring, wants to defer tax, or believes in the business's continuation. Avoid relying on it when the seller wants a full cash exit and walks the moment they are paid — that is a red flag about the handoff.
Revenue-based financing works best when you need to bridge the post-close working-capital gap fast, the business has steady bank deposits, and your personal credit or tied-up equity blocks a bank line. Avoid when you are trying to fund the entire purchase price with it (wrong tool, wrong cost for that job) or when the acquired revenue is too new to support flexible repayment. Reserve it for defined, short-duration needs with a clear payoff path.
A realistic example: layering the stack on a Main Street deal
The figures below are illustrative, for example only, to show how the layers fit together — not a quote, and not a promise of any specific terms.
| Capital layer | Example role in the deal | Typical speed | Qualifies mainly on |
|---|---|---|---|
| SBA 7(a) term loan | Pays the bulk of the purchase price to the seller | 60-90 days | Target's cash flow & debt-service coverage |
| Seller note (on standby) | Bridges part of the price; supports equity injection | Negotiated at LOI | Seller confidence & deal terms |
| Buyer equity injection | Clears the required down payment | At closing | Your available cash |
| Revenue-based financing | Covers post-close payroll, deposits, and the transition dip | 24-48 hours | Bank deposits & revenue (FICO 500+) |
Notice the pattern: the slow, cheap money does the heavy lifting on price, while the fast, revenue-qualified money absorbs the timing shocks. A buyer who lines up only the SBA loan and forgets the bottom layer often spends the first quarter fighting a cash crunch instead of running the business.
Getting acquisition-ready: what to prepare before you need capital
Lenders across every layer reward buyers who show up organized. Before you approach any capital source, assemble the target's last two to three years of tax returns and profit-and-loss statements, recent business bank statements, a clean source-and-use of funds, and your own personal financial statement. For the revenue-based layer specifically, the most recent three to six months of business bank statements are the core of the file — they are what the underwriter reads to size the offer.
Sequence matters. Get the senior debt under letter of intent first so you know the size of the gap, negotiate the seller note in parallel, and line up the revenue-based bridge so it is ready to draw the week you close — not the week you run short. Approvals in the bottom layer are fast, but they are never automatic or guaranteed, so confirm the offer terms in writing before you count on the cash. If you want a fuller map of the products beyond acquisitions, our business funding guide covers each one in depth.
Frequently asked questions
Can I buy a business with no money down in the US?
True zero-down acquisitions are rare and risky. SBA 7(a) deals generally require at least a 10% equity injection, though up to half of that can sometimes come from a seller note on full standby. What buyers can do is minimize out-of-pocket cash by combining SBA debt, seller financing, and a revenue-based bridge for working capital — but expect to bring some skin in the game.
What is the best loan for buying an existing business?
For most US deals under $5 million with provable cash flow, the SBA 7(a) loan is the default because of its long terms and lower down payment. Larger or asset-heavy deals may fit a conventional bank term loan. Neither, however, is built to cover the post-close working-capital gap — that is where revenue-based financing typically fills in.
How fast can I get financing for an acquisition?
It depends on the layer. SBA and conventional acquisition loans commonly take 60 to 90 days to close. Revenue-based financing, which qualifies on bank deposits and revenue rather than lengthy underwriting, can fund in as little as 24 to 48 hours — which is why it is used to bridge the fast-moving cash needs that appear right after closing.
Can I use revenue-based financing to buy the whole company?
That is the wrong tool for that job. Revenue-based financing is short-duration capital sized to a business's cash flow, best used for the working-capital and integration gap after a deal closes — starting around $10,000. The purchase price itself is better carried by SBA or conventional debt plus a seller note. Match each source to the layer it is designed for.
Do I need good personal credit to fund an acquisition?
For SBA and bank debt, your credit matters but the target's cash flow matters more. For the revenue-based layer, approval is driven primarily by the business's bank deposits and revenue, and FICO of 500 or above can qualify. This is why buyers whose equity is tied up in the deal often use revenue-based financing for the transition period.
What working-capital costs do buyers usually underestimate?
Payroll during the ownership handoff, supplier deposits and inventory, transaction and legal fees, marketing to retain customers who feel the change, and a reserve for the near-certain revenue dip that follows a change of control. Planning a dedicated working-capital layer before closing is what separates a smooth first quarter from a cash scramble.
Is approval for revenue-based financing guaranteed?
No. No legitimate funder guarantees approval. Offers depend on the business's bank deposits, revenue consistency, and other underwriting factors, and terms should always be confirmed in writing before you rely on the cash. The advantage of the revenue-based route is speed and flexible, cash-flow-based repayment — not certainty of approval.
How should I sequence the different capital sources?
Get your senior acquisition debt under a letter of intent first so you know the gap, negotiate the seller note in parallel, confirm your equity injection, and line up a revenue-based bridge so it is ready to draw the week you close. Sequencing the layers in advance prevents the common mistake of securing the purchase money but running short on operating cash.
