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Financeria Guide

How to finance a business acquisition

A business acquisition does not necessarily require the buyer to fund the full purchase price in cash.

Depending on the target business and buyer profile, a transaction may combine buyer equity, acquisition financing, seller financing and other forms of deferred consideration.

Financeria Research · Last reviewed: September 2026

The short answer

A simplified acquisition structure

Purchase price
$3.0M
Buyer equity
$600K
Acquisition financing
$1.8M
Seller financing
$600K
Total
$3.0M

Illustrative example only. Not a financing commitment.

The main financing components

Buyer equity

The capital contributed directly by the buyer and, where applicable, co-investors.

Acquisition financing

External debt can fund part of an acquisition when the target business and transaction meet a lender's requirements. Cash flow, debt-service capacity, business quality and buyer profile all matter.

Seller financing

With seller financing, the seller agrees to receive part of the purchase price over time rather than entirely at closing. This can reduce the amount of outside financing required and help bridge a transaction.

Earn-out

An earn-out makes part of the purchase price contingent on future business performance. It can help bridge differing expectations about future value.

SBA 7(a) financing may be relevant to some acquisitions

For qualifying U.S. transactions, SBA 7(a) loans can be used for a change of ownership.

Eligibility, structure and approval depend on the specific borrower, target business, lender and SBA requirements.

What lenders may consider

  • stable cash flow
  • historical profitability
  • debt-service capacity
  • purchase-price multiple
  • customer concentration
  • industry risk
  • buyer experience
  • buyer equity
  • seller financing
  • transaction terms

Your available cash is not necessarily your purchase-price limit.

But a larger theoretical acquisition range is not a financing approval either.

The target company's financial performance ultimately matters.

What could you own?

Financeria estimates an indicative acquisition range based on your capital, experience and potential deal structure.

Check your acquisition range

Indicative only · No financing commitment

Keep reading

Frequently asked questions

How much equity do I need to buy a business?
There is no universal percentage. The required equity depends on the target, financing structure, buyer profile and lender requirements.
What is seller financing?
Seller financing means the seller agrees to defer part of the purchase price and receive it under agreed repayment terms after closing.
Can an SBA loan be used to buy a business?
SBA 7(a) financing can be used for eligible changes of ownership, subject to applicable SBA and lender requirements.
Does Financeria provide loans?
No. Financeria is not a lender and does not make financing commitments.

Further sources