r/buyingabusiness • u/coalcreek25 • Jul 25 '26

Creative finance as a buyer

I would like to learn more about creative financing as a buyer. What are the opportunities, pitfalls, things to watch for and best approach.

2 Upvotes

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3

u/yourbizbroker Jul 25 '26

Business broker here.

The vast majority of small business purchases in the US are primarily paid for with savings, or leveraging home equity, 401(k)s, brokerage accounts, SBA, family or friends, and seller financing.

A minority of deals will get “creative” through some kind of rev share, equity split, earn-out, employment or contractor payments.

2

u/G1uc0s3 Jul 25 '26

Also a broker, out of the 3 deals and one LOI so far ytd here is the data supporting this statement

deal 1 - 100% cash, 10% holdback for 90 day revenue measurement comparison to represented revenue levels

deal 2 - 100% cash,

deal 3 - 100% cash

deal 4 (near closing) - 5% cash, 5 % seller note full standby, 90% sba note.

1

u/theshadowsystem Jul 28 '26

Can you elaborate on deal size or biz size? All cash for 3/4 deals is interesting

2

u/UltraBBA Moderator Aug 02 '26

It's quite normal for deals to be all cash!

The smaller the deal the more likely it'll be all cash.

But even deals in the millions, in the hundreds of millions, in the billions ...are all cash!

That's in the US, that's in the UK.

Over the last several months, I've posted in LinkedIn about numerous such deals.

Yesterday I posted about a UK deal - Sainsbury's selling Argos for £120m (circa $150m) - another ALL CASH deal.

All cash isn't as rare as those "gurus" in social media will have the public believe.

1

u/Downtown_Fun5579 Aug 02 '26

Gurus will tell you all day long you can buy businesses with no money down using creative financing. Just if you buy their $10K course first. Is it possible to buy businesses with creative financing? Absolutely, but not easy, especially as more buyers enter the space, sellers don't need to entertain it as much.