[Crawl-Date: 2026-04-06] [Source: DataJelly Visibility Layer] [URL: https://travisbusinessadvisors.com/zh/articles/how-your-buyer-will-fund-the-acquisition] --- title: How Your Buyer Will Fund the Acquisition | Austin description: SBA loans, seller financing, ROBS, investor capital — every way buyers assemble the money and what each means for your timeline and net proceeds. url: https://travisbusinessadvisors.com/zh/articles/how-your-buyer-will-fund-the-acquisition canonical: https://travisbusinessadvisors.com/articles/how-your-buyer-will-fund-the-acquisition og_title: Travis Business Advisors og_description: Austin's Business Broker for Owners Who Built Something Worth Protecting og_image: https://storage.googleapis.com/gpt-engineer-file-uploads/attachments/og-images/598e6334-eb7e-4cdb-9bad-6a67b74e851b?Expires=1775422155&GoogleAccessId=go-api-on-aws%40gpt-engineer-390607.iam.gserviceaccount.com&Signature=XohJTtkAmsM6NTTTILYOicAWnVPn9C8RCQ9k%2Fn%2FmpCDFMbVeOM4XRpiB1SRlZzisI9hGBq67t7Elh5tKl6vxybSkR94jwptDGkvJFfPhm%2BxbX49eiEdX%2Bmy3Wo2t%2FRJOWybZmdE%2FM9d5a6QbvmWeDseCoNuvsP0ejJcjifGN62GUFqZQWv9oznuhXu0eE0WmDX4BRZi79sE0HYSJ1reAf9eTOueKDWPPjMIr%2FSO%2BcHEebakd679a0byTQHfqUxiWqMCP9cOu2zJwmbWEoFk%2FkUoOMzfjrtyMDbP%2BeEQMQIl22mwKx5qtqCr7hCojQgZF00diNfrALT5nOcvQDRiksQ%3D%3D twitter_card: summary_large_image twitter_image: https://storage.googleapis.com/gpt-engineer-file-uploads/attachments/og-images/598e6334-eb7e-4cdb-9bad-6a67b74e851b?Expires=1775422155&GoogleAccessId=go-api-on-aws%40gpt-engineer-390607.iam.gserviceaccount.com&Signature=XohJTtkAmsM6NTTTILYOicAWnVPn9C8RCQ9k%2Fn%2FmpCDFMbVeOM4XRpiB1SRlZzisI9hGBq67t7Elh5tKl6vxybSkR94jwptDGkvJFfPhm%2BxbX49eiEdX%2Bmy3Wo2t%2FRJOWybZmdE%2FM9d5a6QbvmWeDseCoNuvsP0ejJcjifGN62GUFqZQWv9oznuhXu0eE0WmDX4BRZi79sE0HYSJ1reAf9eTOueKDWPPjMIr%2FSO%2BcHEebakd679a0byTQHfqUxiWqMCP9cOu2zJwmbWEoFk%2FkUoOMzfjrtyMDbP%2BeEQMQIl22mwKx5qtqCr7hCojQgZF00diNfrALT5nOcvQDRiksQ%3D%3D --- # How Your Buyer Will Fund the Acquisition | Austin > SBA loans, seller financing, ROBS, investor capital — every way buyers assemble the money and what each means for your timeline and net proceeds. --- Video Guide Watch: How Your Buyer Will Fund the Acquisition — And Why It Should Be Your First Question 7 min A seller received two Letters of Intent on the same Tuesday. Both offered $2.2 million. Both included earnest money deposits. Both came from buyers with professional cover letters and references. One buyer had $220,000 in personal savings, SBA pre-qualification from an experienced acquisition lender, and was requesting a $220,000 seller note on standard standby terms. The other buyer mentioned "committed investor capital" and "alternative financing arrangements" — with no pre-qualification letter, no proof of funds, and no specifics about where $2.2 million was actually going to come from. The first deal closed in 74 days. The second buyer disappeared during due diligence when the investor capital turned out to be a verbal promise from a college roommate. The price on the LOI is just a number. The capital stack behind it is what determines whether you actually receive that number. ## The Capital Stack: What You're Really Evaluating Every business acquisition has a capital stack — the combination of funding sources that adds up to the total purchase price. When a buyer submits an LOI, the offer price gets the attention. But the capital stack deserves equal scrutiny, because it determines three things that affect you directly: how long it takes to close, the probability of actually closing, and whether you'll be asked to carry part of the price yourself. Here's every source your buyer might use — and what each one means from your side of the table. ## Source 1: SBA 7(a) Loans — The Workhorse You'll See Most Often Roughly 70–80% of business acquisitions in the $500,000–$5 million range involve SBA financing. If you're selling a business in Austin at these levels, your most likely buyer is an SBA buyer. **What it means for your timeline.** SBA loans typically require 60–90 days from accepted LOI to closing. The process involves formal application, underwriting, a business appraisal, and — for RE-heavy deals — an environmental assessment. This is significantly slower than a cash close, and it's the timeline you should plan around. **What it means for scrutiny of your business.** The SBA underwriter will examine your financials independently. They'll question your add-backs. They'll evaluate customer concentration. They'll stress-test the debt service coverage ratio. Your business needs to generate at least $1.25 in cash flow for every $1.00 in debt service — and the underwriter calculates that number themselves. **What it means for deal certainty.** SBA deals can collapse late. An underwriter who doesn't like the numbers can kill a deal at week eight that you thought was on track. Mitigate this by requiring SBA pre-qualification — an actual letter from an actual lender — before accepting the LOI. **What to ask the buyer.** Which lender? Have they issued a pre-qualification letter? What equity injection amount has the lender approved? Has the lender reviewed your CIM? An SBA buyer who can answer all four is a serious buyer. One who can't answer any of them is still shopping. When real estate is part of the deal — car washes, dental practices, self-storage, HVAC facilities — the SBA 504 program often enters the picture. It combines a conventional bank loan (50%), a Certified Development Company loan (40%), and the buyer's equity (10%). The CDC portion carries a fixed rate in the 5–7% range, which can make the deal economics more attractive to both sides. This is exactly the kind of structural complexity where having a broker who understands RE-heavy transactions makes a measurable difference in your outcome. ## Source 2: Seller Financing — When You Become Part of the Capital Stack You're not just the seller in this transaction — there's an 80–90% chance you'll be asked to be one of the lenders. **Why it exists.** SBA loans typically cover 70–80% of the purchase price. The buyer's equity covers 10–15%. That leaves a gap. The seller note fills it. This isn't a sign of a weak buyer — it's standard deal architecture. **What it means for your proceeds.** On a $2 million sale, a 15% seller note means $300,000 arrives over time rather than at closing. With a 24-month SBA standby requirement, you won't receive a single payment on that note for two years. Payments begin in year three, typically over 3–5 years at 5–7% interest. **What it means for your risk.** You're carrying a subordinated note — the SBA lender gets paid first if the business struggles. Your security is a second lien on business assets and, ideally, a personal guarantee from the buyer. **What it means for your total economics.** A $300,000 seller note at 6% over 5 years with a 24-month standby generates approximately $48,000 in total interest. Your actual proceeds increase from $2 million to roughly $2.048 million. The real question isn't whether the interest compensates you. It's whether the deal closes without it. ## Source 3: The Buyer's Personal Savings The SBA requires a minimum 10% equity injection from the buyer's personal funds — not borrowed money. This is the skin-in-the-game requirement, and it's one of the strongest signals of buyer quality you'll encounter. **What to verify.** Request proof of funds — a bank or brokerage statement — before accepting the LOI. The SBA verifies this during underwriting, but you should verify it first. A buyer who can't demonstrate their equity injection isn't ready to make an offer. **What it tells you.** A buyer with $250,000 in liquid savings for a $2 million deal has cleared the first financial hurdle. They've accumulated capital, they have financial discipline, and they have something significant to lose if the acquisition fails. That personal exposure is your alignment mechanism. ## Source 4: Retirement Rollovers (ROBS) ROBS — Rollover for Business Startups — allows buyers to use 401(k) or IRA funds as equity injection without early withdrawal penalties or taxes. It's legal, increasingly common, and should neither alarm you nor reassure you by itself. **What it means for your deal.** ROBS funds count as legitimate equity injection under SBA rules. A buyer with $400,000 in a 401(k) who executes a ROBS has the same purchasing power as one with $400,000 in savings. The SBA treats them identically. **What to verify.** Ask whether the ROBS is already established or still being set up. Setup takes 3–4 weeks through a specialized provider. A buyer whose ROBS isn't yet in process may add a month to your timeline. Build that into your due diligence period expectations. ## Source 5: Home Equity This is where sellers need to pay close attention — because the SBA rules create a distinction that many buyers misunderstand. **A home equity line of credit (HELOC) does not count as SBA equity injection.** The SBA considers it borrowed money. A buyer who plans to fund their down payment with a HELOC is a buyer whose deal may fail in underwriting. **Cash-out refinance proceeds can count** — if the funds have been seasoned in the buyer's account for 60–90 days. A buyer who refinanced six months ago is on solid ground. A buyer who plans to refinance after signing the LOI is adding months of risk to your timeline. **The question to ask.** "Is your equity injection in a liquid account today, or does it require additional transactions?" If it requires a refinance, a ROBS setup, or a stock liquidation, factor that timeline into your expectations. ## Source 6: Family Capital and Private Investors When a buyer mentions "investor capital" or "family backing," your next question should be about structure. **Gift capital** counts as equity injection if documented with a formal gift letter confirming no repayment is expected. If the "gift" is actually an undisclosed loan, the SBA considers that fraud — and the deal collapses if discovered during underwriting. **Private loans** count as equity injection only if on full standby for the life of the SBA loan — meaning the family lender receives no payments while SBA debt is outstanding. Few private lenders agree to those terms once they understand the commitment. **Equity investment** means a third party takes an ownership stake. This is how search fund deals work — and when legitimate, it's excellent. The capital is real, the structure is professional, and the investors are motivated. **Your verification standard.** When a buyer cites investor or family capital: Who is the investor? How much have they committed? Is it documented? Has the SBA lender reviewed and approved the source? Is the investor already in the operating agreement? A buyer who answers "my brother-in-law said he's in" is not the same as one who presents a signed commitment letter that the SBA lender has already vetted. ## Source 7: Conventional Bank Loans Occasionally — usually on deals above $5 million or with very wealthy buyers — you'll encounter conventional financing with no SBA involvement. **The upside for you.** Potentially faster close (30–45 days). You may not be asked to carry a seller note. Higher buyer equity (25–30% down) typically means a more committed buyer. **The reality.** It's rare in the $1–5 million range. Most first-time buyers don't have the liquidity for a 25–30% down payment, which is exactly why SBA dominates the market. ## Five Questions to Ask Before You Accept Any LOI These reveal whether a buyer's capital stack is real: What percentage is your personal equity injection, and can you provide a current proof-of-funds statement? Which SBA lender has pre-qualified you, and can you provide the letter? Are you requesting seller financing — and if so, what amount, rate, and term? Is any portion of your equity coming from ROBS, home equity, or third-party investors — and if so, are those funds available today? What is your realistic timeline from accepted LOI to closing? A buyer who answers all five with specifics and documentation is a buyer who can close. A buyer who answers with generalities and promises is a buyer who will cost you months of uncertainty before the deal either closes late or collapses entirely. ## How We Help You Evaluate This At Travis Business Advisors, buyer qualification isn't a formality — it's one of the most important services we provide. Before a buyer sees your business name, we verify their financial capacity, their funding structure, and their realistic ability to close. We've seen every capital stack combination, every creative financing arrangement, and every verbal promise that didn't survive underwriting. The price on the LOI matters. But the money behind the price matters more. We make sure you know the difference. ## Structured Data (JSON-LD) ```json {"@context":"https://schema.org","@type":"Article","headline":"How Your Buyer Will Fund the Acquisition \u2014 And Why It Should Be Your First Question","description":"SBA loans, seller financing, ROBS, investor capital \u2014 here\u0027s every way business buyers assemble the money, and what each source means for your timeline, your risk, and your net proceeds.","image":"https://travisbusinessadvisors.com/infographics/fund-acquisition-buyer.jpg","author":{"@type":"Person","name":"Slava Davidenko"},"publisher":{"@type":"Organization","name":"Travis Business Advisors","url":"https://travisbusinessadvisors.com"},"datePublished":"2026-02-08","dateModified":"2026-02-16","mainEntityOfPage":"https://travisbusinessadvisors.com/articles/how-your-buyer-will-fund-the-acquisition","timeRequired":"PT9M","articleSection":"How Does This Work?","inLanguage":"en-US"} ``` ```json {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://travisbusinessadvisors.com"},{"@type":"ListItem","position":2,"name":"Sell Your Business","item":"https://travisbusinessadvisors.com/thinking-of-selling"},{"@type":"ListItem","position":3,"name":"Articles","item":"https://travisbusinessadvisors.com/articles"},{"@type":"ListItem","position":4,"name":"How Your Buyer Will Fund the Acquisition \u2014 And Why It Should Be Your First Question"}]} ``` ```json {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://travisbusinessadvisors.com/"},{"@type":"ListItem","position":2,"name":"Sell Your Business","item":"https://travisbusinessadvisors.com/thinking-of-selling"},{"@type":"ListItem","position":3,"name":"Articles","item":"https://travisbusinessadvisors.com/articles"},{"@type":"ListItem","position":4,"name":"How Your Buyer Will Fund the Acquisition \u2014 And Why It Should Be Your First Question"}]} ``` ## Discovery & Navigation > Semantic links for AI agent traversal. * [TravisBusiness Advisors](https://travisbusinessadvisors.com/) * [About](https://travisbusinessadvisors.com/about) * [Sell Your Business](https://travisbusinessadvisors.com/thinking-of-selling) * [Buy a Business](https://travisbusinessadvisors.com/thinking-of-buying) * [Industries](https://travisbusinessadvisors.com/industries) * [Start a Confidential Conversation](https://travisbusinessadvisors.com/contact) * [Articles](https://travisbusinessadvisors.com/articles) * [Privacy Policy](https://travisbusinessadvisors.com/privacy) * [Terms of Use](https://travisbusinessadvisors.com/terms) * [Case Studies](https://travisbusinessadvisors.com/case-studies) * [Glossary](https://travisbusinessadvisors.com/glossary) * [FAQ](https://travisbusinessadvisors.com/faq) * [Videos](https://travisbusinessadvisors.com/videos) * [Infographics](https://travisbusinessadvisors.com/infographics) * [Interactive Tools](https://travisbusinessadvisors.com/tools) * [Seller Guide](https://travisbusinessadvisors.com/seller-guide) * [Buyer Guide](https://travisbusinessadvisors.com/buyer-guide) * [Take the Quiz](https://travisbusinessadvisors.com/journey) * [Journey Map](https://travisbusinessadvisors.com/journey#map) * [(878) 888-2552](tel:8788882552) * [vd@travisbusinessadvisors.com](mailto:vd@travisbusinessadvisors.com) * [Disclaimer](https://travisbusinessadvisors.com/disclaimer) * [Accessibility](https://travisbusinessadvisors.com/accessibility)