I am looking for a loan to finance a business acquisition without real estate. The purchase price of the business is about 400K. Cash flow is approx. 225K, which is more than enough to service the debt + living wage. Net worth of the business before this loan is about 160K (mostly capital equipment). The seller is willing to finance 10% of the deal (or maybe just a bit more). My credit score is over 800. I have sufficient management experience. All that is fine, I think.

Now the bad part is that I only have about 25K liquid cash on hand. I have an additional 20K in a retirement fund. I also have about 100K in pre-existing lines of credit that are completely unused at the moment, and the business cash flow would also be sufficient to service these if necessary.

What options do I have for structuring this deal (if any)? My main problem obviously is the equity injection. Is there anyway to use my lines of credit for this? Or is my only option some type of gift and/or equity partner? Any suggestions/advice would be appreciated.

Does the $400 include the real estate? I assume the real estate is $240 plus the business at $160. What are the terms of the credit line?

You can use the lines of credit if as you say the cash flow of the business pays of their debt service, the sellers financing debt service as well as the primary financing.

Make surethat the terms of the lines allow you to use the money for the purchase of a business.

Approach a few different banks with your business plan and ask about SBA backed loans.

There is no real estate involved. The transaction is for the business only. The credit line is unsecured, prime + 2%.

Thanks for the reply. That's what I was hoping, but I thought I had read somewhere that SBA does not allow you to borrow any of the down payment. If they do, that is fantastic.