Lendway Capital Advisors

The most expensive capital is not always the capital with the highest rate.

Sometimes, it is the capital that costs you ownership.

Giving away equity can solve a funding problem today, but it can create control problems later.

More opinions.
More complexity.
Shared profits.
Less freedom.

That is why Pari Passu financing can be a strong option for the right lower middle market acquisition.

When a buyer’s SBA 7(a) exposure limit is maxed out, a conventional note can be added in a Pari Passu position for additional capital. That can help support larger acquisitions without immediately bringing in outside investors.

For the right acquisition, debt may be the cleaner path.

The business still has to make sense.
The cash flow still has to support it.
The buyer still has to qualify.

But before giving away a percentage of the company, it is worth asking:

Can this deal be structured with non-equity debt instead?

Learn more: https://www.lendwayca.com/pari-passu-loans/

A lot of business buyers focus only on the rate.

That is a mistake.

The structure matters just as much, and sometimes more.

With SBA financing, the right acquisition may benefit from:

• Up to 75% financing
• No traditional commercial loan covenants
• No 3-5 year balloon payment
• Little to no prepayment penalty on many 10-year SBA loans
• The ability to roll certain closing costs into the loan

That can make a huge difference when buying an existing business.

Conventional commercial financing can come with requirements that business owners do not fully understand until they are already in the loan.

Minimum net worth requirements.
Fixed charge coverage tests.
Liquidity requirements.
Debt-to-equity restrictions.
Renewal risk when a balloon comes due.

SBA loans are not perfect.

But when they are structured correctly, they can be a very strong option for business acquisition financing.

The problem is not usually the SBA.

The problem is working with people who do not know how to get SBA deals across the finish line.

At Lendway Capital Advisors, we help structure business acquisition deals with urgency, experience, and a clear understanding of what the funding source needs to see.

Learn more: https://www.lendwayca.com/small-business-administration-sba-loans/

An SBA loan can be a great tool.

But in the wrong hands, it can become a nightmare.

We have seen buyers and brokers lose time because someone involved did not understand how SBA acquisition financing actually works.

That usually leads to the same problems:

The deal is not structured correctly.
The documents are not collected early enough.
Cash flow issues are missed.
SOP problems show up too late.
The borrower gets dragged through the process with no clear answer.

That is not how business acquisition financing should work.

SBA loans can move efficiently when the right team is involved.

The file still needs to make sense. The buyer still has to qualify. The business still has to cash flow. The numbers still have to support the debt.

But when those pieces are there, the process should not sit and collect dust.

At Lendway Capital Advisors, we are on a mission to change the negative perception of SBA loans because we know where most of that frustration really comes from.

Bad process.

Bad structure.

Bad advice.

The right acquisition deserves better than that.

Learn more: https://www.lendwayca.com/small-business-administration-sba-loans/

SBA loans get blamed for a lot of bad experiences.

But most of the time, the real problem was not the SBA.

It was the lender, bank, broker, or advisor handling the file.

They didn’t understand the process.
They didn’t know the SOP.
They didn’t package the loan correctly.
They let issues sit too long.
They gave the borrower false confidence instead of real answers.

That is where deals get stuck.

SBA loans can be complex, but complex does not mean impossible. For the right business acquisition, an SBA loan can still be one of the best financing tools available.

Higher leverage.
Long amortization.
No balloon payments.
Limited or no prepayment penalties in many cases.
Closing costs that may be rolled into the loan.

The key is knowing how to structure the deal from the beginning.

At Lendway Capital Advisors, we help business buyers and brokers understand what can work, what will not work, and what needs to be fixed before the file gets too far down the road.

Time kills deals.

Let’s not waste it.

Learn more: https://www.lendwayca.com/small-business-administration-sba-loans/

Before a buyer gives away part of the company, the debt structure should be looked at first.

When a deal is too large for standard SBA 7(a) exposure, there may still be another way to structure it.

Pari Passu financing can allow the SBA 7(a) exposure limit to be maxed out, then add a conventional note in Pari Passu position for the right acquisition.

That can be the difference between:

Giving away ownership
or
Structuring the deal with non-equity debt

There is still no shortcut.

The company has to cash flow.
The buyer has to be qualified.
The numbers have to support the debt.
The structure has to make sense.

But if the deal works, Pari Passu can help buyers avoid bringing in investors too early.

Before you dilute ownership, look at the debt structure first.

Learn more: https://www.lendwayca.com/pari-passu-loans/

Not every larger acquisition needs outside equity.

For the right lower middle market deal, Pari Passu financing may help build a larger capital stack without giving away ownership.

The structure can include:

• SBA 7(a) financing up to the exposure limit
• A conventional note in Pari Passu position
• Seller financing
• Buyer equity injection

That matters because equity can change the deal long after closing.

You may share profits.
You may lose control.
You may have more people involved in major decisions.
You may make future funding or a future sale more complicated.

Debt is not automatically a bad thing.

If the cash flow supports it, debt can help buyers keep ownership while still getting the acquisition done.

Pari Passu is not for every transaction, but it is worth understanding before assuming investors are the answer.

Learn more: https://www.lendwayca.com/pari-passu-loans/

There is a cost to bringing investors into an acquisition.

Sometimes it is worth it.

Sometimes it is not.

Giving up equity may help fund a larger deal, but it can also mean giving up control, sharing profits, and adding more people to every major decision.

That is why Pari Passu financing matters.

When the SBA 7(a) exposure limit is maxed out, a conventional note may be added in a Pari Passu position for the right acquisition.

This can help create a larger capital stack using non-equity debt instead of immediately giving away part of the company.

The deal still has to make sense.

The business has to cash flow.
The buyer has to qualify.
The structure has to work.

Before giving up ownership, buyers and brokers should ask:

Can this acquisition be structured with debt instead?

Learn more: https://www.lendwayca.com/pari-passu-loans/

Giving up equity might help you fund a deal.

But it can also cost you control, profits, and flexibility later.

That is why acquisition buyers should understand Pari Passu financing before assuming investors are the only option.

When your SBA 7(a) exposure limit is maxed out, a Pari Passu structure may allow an additional conventional note to be added alongside the SBA loan.

That means the right lower middle market acquisition may be able to use debt instead of giving away ownership.

Why does that matter?

Because once equity partners enter the deal:

• You may answer to someone else
• Profits may be shared
• Future funding can get more complicated
• Selling the company can become harder
• Different visions can create stress
• Control may no longer be fully yours

Debt is not automatically bad.

If the business has the cash flow to service it, debt can help buyers keep ownership while still getting the deal done.

Pari Passu is not for every acquisition. The business has to cash flow. The buyer has to qualify. The structure has to make sense.

But before you give up part of the company, it is worth asking:

Can this deal be structured with non-equity debt instead?

Learn more: https://ow.ly/Szzr50Z4Ljo