Advanced Acquisition Financing - The Blueprint System

The Financing Stack Revolution

Traditional buyers use 1-2 sources
Smart buyers stack 4-6 sources
Result: 95-100% financing possible
Keep your cash for operations/growth
Buy bigger deals than you "can afford"

The Master Financing Matrix

Creative Financing Structures

Source	Typical %	Cost	Speed	Requirements
SBA 7(a)	75-90%	Prime + 2.75%	45-60 days	Good credit, experience
Seller Financing	10-50%	5-8%	Immediate	Seller motivation
Asset-Based	50-70%	8-12%	14-21 days	Quality assets
Revenue-Based	20-40%	15-25%	7-10 days	Strong revenue
Investor/Partner	20-100%	Equity %	Variable	Good deal/pitch
Earnout	10-40%	0%	Immediate	Future performance

Structure #1: The Zero Down Stack

Purchase Price: $1,000,000 Financing Stack: - SBA Loan: $700,000 (70%) - Seller Note: $200,000 (20%) - Working Capital Line: $75,000 (7.5%) - Earnout: $25,000 (2.5%) Your Cash: $0 Monthly Payment: ~$8,500 Cash Flow: $15,000 Positive $6,500/month from day 1!

Structure #2: The Asset Strip

How it works:

Buy business for $500k with $50k down
Immediately sell excess equipment for $75k
Factor receivables for $60k
Refinance real estate for $100k
Result: $185k cash out, $50k invested
Net: $135k profit at closing!

Advanced SBA Strategies

SBA Hacks Most Brokers Don't Know

The Equity Injection Alternatives:

Seller Note on Standby: Counts as equity if no payments for 2 years
Assets Outside Business: Home equity, stocks, 401k
Buyer's Other Business: Cross-collateralize
Gift Letters: Family/friends "gift" with side agreement

The Working Capital Add-On:

Add 3-6 months working capital to loan
Reduces your cash needs post-close
Often overlooked by buyers
Can add $100-300k to loan amount

Seller Financing Mastery

Getting Sellers to Finance 50%+

The Tax Argument:

"If you take all cash, you'll pay 30%+ in taxes this year. If you take payments over 5 years, you can use installment sale treatment and save $200k in taxes. Plus, you'll earn 6% interest instead of 2% in the bank."

The Security Package:

Personal guarantee (negotiate release triggers)
Second position on assets
Cross-default with bank loan
Financial reporting requirements

Seller Note Structures:

Traditional: Fixed payment over 3-7 years
Balloon: Interest only, principal at end
Revenue-Based: Payments tied to performance
Convertible: Can convert to equity

Alternative Lenders Decoded

When Banks Say No

Lender Type	Best For	Typical Terms	Pros/Cons
Revenue-Based	High margin business	10-20% of revenue	Fast but expensive
Asset-Based	Equipment/inventory heavy	Prime + 4-6%	Flexible, monitoring
Mezzanine	Growth capital	12-18% + warrants	No dilution, costly
Merchant Cash	Emergency only	20-40% APR	Daily payments
Crowdfunding	Consumer brands	Equity or debt	Marketing benefit

The Investor Partnership Model

Bringing in Money Partners

Structure Options:

1. Preferred Equity:

Investor gets 8-12% preferred return
You get 100% of upside after pref
Buy them out in 3-5 years

2. Split Equity:

70/30 or 60/40 typical splits
You get more for operating
Waterfall distributions

3. Debt + Kicker:

10-12% interest
Plus 10-20% equity kicker
Capped upside for investor

Government Programs Beyond SBA

Case Study: 100% Financed Deal

Program	What It Offers	Requirements
USDA B&I	Up to 80% in rural areas	Population <50,000
State Funds	Low-interest gap financing	Job creation
EDA Grants	Up to $3M for infrastructure	Distressed areas
New Market Tax Credits	39% tax credit	Low-income areas
HUBZone	Contracting preferences	Qualified zones

$2.5M HVAC Company - Zero Down

Deal Structure:

Purchase Price: $2,500,000
Down Payment Required: $250,000

Financing Stack Created:

SBA 7(a) Loan: $1,875,000 (75%)
Seller Note: $375,000 (15% standby)
Equipment Refinance: $150,000
Investor Partner: $100,000 for 10%
Working Capital Line: $125,000

Results:

Total Capital Raised: $2,625,000
Personal Cash In: $0
Extra Working Capital: $125,000
Monthly Debt Service: $22,000
Monthly Cash Flow: $35,000
Net Positive: $13,000/month

Earnouts as Financing

Making Earnouts Work

Structure for Success:

Base price covers seller's needs
Earnout is "gravy" for seller
Metrics you can control
Shorter periods (1-2 years)
Clear definitions

Example Earnout Structure: Base Price: $1.5M (paid at closing) Year 1: 20% of revenue over $3M baseline Year 2: 15% of revenue over $3.5M baseline Cap: $500k maximum earnout Seller gets security of base price You finance $500k through growth Win-win structure

Accounts Receivable Financing

Turn AR into Cash

Options Ranked by Cost:

Bank Line of Credit: 80% advance, Prime + 2%
Asset-Based Lender: 85% advance, Prime + 4%
Factoring Company: 90% advance, 1-3% per month
Spot Factoring: 95% advance, 3-5% per invoice

Hidden AR Value:

Most businesses have 45-60 days sales in AR
Can finance 80% immediately
$2M revenue business = $250k in AR = $200k cash

Equipment Financing Strategies

The Ultimate Financing Checklist

Strategy	How It Works	Cash Generated
Sale-Leaseback	Sell equipment, lease it back	70-80% of value
Refinance	New loan on paid-off equipment	50-60% of value
Trade-In	Upgrade with financing	100% of new
Rental Convert	Rent vs. buy initially	Preserves cash

Before Closing Any Deal

Traditional Sources Exhausted:

□ SBA pre-approval obtained
□ Bank relationships explored
□ Seller financing negotiated
□ Equipment values assessed

Creative Sources Explored:

□ AR financing quoted
□ Investor partners approached
□ Earnout structured
□ Asset sales identified
□ Government programs researched

Stack Optimization:

□ Lowest cost capital first
□ Covenants don't conflict
□ Cash flow covers all payments
□ 6-month reserve maintained

Financing Source Directory

Top Providers by Category

SBA Preferred Lenders:

Live Oak Bank (nationwide)
Huntington Bank (Midwest)
Wells Fargo (large deals)

Asset-Based Lenders:

CIT Group
PNC Business Credit
Accord Financial

Alternative Lenders:

Lighter Capital (revenue-based)
Clearbanc (e-commerce)
Fundbox (working capital)