What are creative ways to finance buying a business?

Which creative structures work with an SBA loan?

Each of these is allowed under SBA SOP 50 10 8.1, which applies to loans that receive an SBA loan number on or after October 1, 2026. Each has a limit.

1. Seller note on full standby. The seller is paid no principal or interest for the life of the SBA loan. It can count toward the injection, but standby debt and small passive investors together can supply no more than half of it.
2. Regular seller note. Paid while the SBA loan is outstanding. It does not count toward the injection. The lender includes its payments in debt service coverage at a maximum 10-year amortization. Reports say the wait before a seller note can be refinanced rose from 24 to 36 months.
3. Seller keeps a stake (partial change of ownership). Eligible since SOP 50 10 8 took effect June 1, 2025. It must be a stock or membership-interest purchase. A seller who keeps equity must give a full personal guaranty for at least 2 years after disbursement.
4. Passive minority investors. Investors holding under 20% in aggregate, with no control, can fund part of the injection. They generally receive only tax distributions until the SBA loan is repaid.
5. ROBS. Rolling pre-tax retirement funds into a new C-corp's plan, which buys company stock. Needs roughly $60,000 or more of rollable funds.
6. Seller keeps the real estate. The seller holds the property and leases it to you. You finance a smaller price. Negotiate a lease term that matches your loan.
7. Seller transition. The seller can stay as a consultant or employee for up to 24 months in aggregate after closing, up from 12. That supports the transfer of relationships, which supports the lender's view of the deal.

Worked example: seller rollover versus a full purchase

Assume a business worth $2,000,000 for 100% of the stock, with $60,000 of working capital and $40,000 of fees. Rate 10%, the maximum for loans over $350,000 with prime at 7%. The fee and working capital figures are illustrative.

Full purchase

1. Total project costs: $2,000,000 + $60,000 + $40,000 = $2,100,000.
2. Minimum injection: 10% x $2,100,000 = $210,000.
3. SBA loan: $1,890,000. Annual payment over 10 years: about $299,700.

Buyer purchases 80%, seller keeps 20%

1. Price for 80% of the stock: $1,600,000.
2. Total project costs: $1,600,000 + $60,000 + $40,000 = $1,700,000.
3. Minimum injection: 10% x $1,700,000 = $170,000.
4. SBA loan: $1,530,000. Annual payment over 10 years: about $242,600.
5. Savings: $40,000 less cash, $360,000 less debt and about $57,100 less annual debt service.

The costs: the seller keeps 20% of the profits and a vote, guarantees the loan for at least 2 years, and needs an agreed path to sell you the rest. Write that path into the operating or shareholder agreement before closing.

Which structures work mainly outside the SBA?

• Earnouts. Payments contingent on future performance. SBA rules prohibit seller earnouts. In general lower-middle-market M&A, earnouts commonly cover 10% to 30% of value, and SRS Acquiom data shows only 63% pay in full.
• Large seller notes. The median stated seller note in listings is 30% of the price at 7% over 3 years, in the 20.4% of listings that offer seller financing at all. In closed deals in the IBBA's Q2 2026 data, seller financing was under 10% of deal value. With an SBA loan, a note that pays during the loan is counted in coverage, and total debt cannot exceed the appraised value.
• 100% seller financing. Possible and rare. Expect the price or terms to reflect the seller's risk.
• Paying with stock. A holding company can pay part of the price in its own shares. Private shares are hard for a seller to value or sell. Public shares are easier, but stock-paid deals carry dilution and, in academic data, underperform cash deals.

What is hype?

• "No money down." As of October 2026, an SBA Initial Acquisition needs a 10% injection that the lender cannot reduce. My view is that no-money-down deals at good prices are unlikely.
• "Use an earnout to close the gap" on an SBA deal. Prohibited.
• "The seller note counts as your down payment." Only on full standby, and only up to half.
• "Use projections to justify the price." Under SOP 50 10 8.1, coverage is tested on historical or adjusted historical cash flow. Projections cannot be used to meet the test.

If you already own a business

An existing owner has two options a first-time buyer lacks. A Business Expansion lets the lender reduce or waive the injection with strong liquidity and positive net worth, at a 1.15x coverage test. And a holding company with real earnings can offer sellers equity in a larger platform. That works best when the platform is valued at a higher multiple than the business it buys. See How do you pay a seller with stock instead of cash?

Where these numbers come from: SBA rules are from SBA SOP 50 10 8 and 8.1 as summarized by Beancount, FunderIntel and Cantrell Law. Partial change of ownership rules are from Starfield & Smith. Earnout data is from Livmo citing SRS Acquiom. Seller note data is from BigIdeasDB, the BizBuySell buyer survey and the IBBA Market Pulse Q2 2026. ROBS is from Guidant Financial. Stock-deal performance is from a study summarized on the CLS Blue Sky Blog. Confirm current terms with an SBA lender. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling, and the summaries above are secondary sources.

Related questions

Can I combine a seller note and an SBA loan?

Yes. In a BizBuySell survey, 67% of buyers planned to use SBA and 61% wanted seller financing. As of October 2026, a full-standby note can cover up to half of the 10% injection. A note that pays during the SBA loan is counted in the coverage test instead.

Is an earnout allowed with an SBA loan?

No. SBA rules prohibit seller earnouts in SBA-financed acquisitions. Use a fixed seller note or a price adjustment instead.

Can the seller stay on after closing?

Yes, for up to 24 months in aggregate as a consultant or employee under SOP 50 10 8.1, up from 12. A seller who keeps equity must also guarantee the loan for at least 2 years.

What comes next

The seller is the most flexible source in every structure above, so learn how the note itself works: How does seller financing work when you buy a business? The buyers who end up with the most valuable companies decide what the business goes into before they buy it, because that decides what currency they can offer the next seller.

Related articles

• How do you finance buying a business?
• Can you really buy a business with no money down?
• Can I use my 401(k) to buy a business (ROBS)?
• What is rollover equity and how much is typical?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.