Beyond the Standard Purchase
Many business acquisitions involve creative structuring beyond a simple all-cash or SBA-financed deal. Understanding these tools gives you more flexibility and leverage.
Seller Carry (Seller Financing)
The seller finances a portion of the purchase price, typically 10-30%, with payments made over 2-5 years. This keeps the seller invested in a smooth transition and reduces your upfront capital requirement.
Earnouts
A portion of the purchase price is contingent on future performance. Earnouts bridge valuation gaps when the buyer and seller disagree on price. They also reduce buyer risk if the business underperforms.
Equity Rollovers
The seller retains a minority ownership stake in the business post-closing. This aligns long-term incentives and can reduce the total capital you need at closing.
When to Use Each Structure
- Seller carry: When you want to reduce cash at close and keep the seller engaged during transition
- Earnouts: When projections are optimistic and you want performance-based pricing
- Equity rollovers: When the seller wants ongoing upside and you want alignment
The Key Principle
Creative structures are tools, not tricks. Used well, they protect both sides and make deals possible that would otherwise fall apart on price alone.
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