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Buying a business is a financing problem before it’s a search problem

Most acquisitions don’t die because a buyer picked the wrong company — they die because the deal was never financeable at the price offered. Here’s how lower-middle-market acquisitions actually get funded, and how the right advisor keeps you from wasting a year chasing deals that were never going to close.

Deal handshake
How deals actually get funded

What lenders underwrite — before you ever sign an LOI

10–15%
typical buyer equity injection on an SBA 7(a)-financed acquisition (2026)
Financing caps the price you can paySBA 7(a) loans — the dominant financing tool for sub-$5M acquisitions — cap at $5M, run 75–85% loan-to-value, and price around 10–11% interest in 2026. Deals priced above what the target’s cash flow can service simply don’t fund.
DSCR is the real gatekeeperLenders need debt-service coverage comfortably above 1.0x–1.25x after a reasonable owner salary. An over-market offer gets re-traded or declined at underwriting, regardless of how good the story sounds.
Seller financing is now standardSeller notes covering roughly 10–20% of price, often held on standby, are an expected structural component of most lower-middle-market deals — and they signal seller confidence to the lender.
Approval takes real timeEven a clean SBA-financed deal runs 60–120 days from LOI to funding — timelines that have to be built into the negotiation, not discovered afterward.

Figures reflect general SBA 7(a) program terms and lower-middle-market financing norms as of 2026, aggregated from lender and acquisition-industry sources — not a financing commitment or guarantee of terms for any specific transaction.

Why acquirers choose Chetrock

Structured the way a lender will actually score it

Most searchers learn acquisition financing the hard way — by losing a deal in underwriting. Our team has worked both sides of lower-middle-market transactions and structures offers the way a lender will actually score them, before you’re six months into exclusivity on a deal that was never going to fund.

Talk to us about your deal
We underwrite before you offerEvery target gets screened for real financability — cash flow coverage, add-back defensibility, and structure — before you spend exclusivity on a deal that can’t fund.
We know the capital stackSBA 7(a), seller notes, and equity — we structure the mix that gets your offer accepted and your lender comfortable.
Off-market sourcingThe most competitively priced targets rarely reach public marketplaces. We source and approach directly.
One team, full dealFrom LOI through close, you work with the same dedicated team who understands both the target and your financing constraints.
Track record

Experience on both sides of the table

Our team has advised both sell-side engagements that close and acquisition searches that require the same underwriting discipline lenders use. That dual perspective is why buy-side clients get deal structures built to actually fund — not just look good on a term sheet.

Reflects our team’s professional background advising both sides of lower-middle-market transactions. Individual transaction terms vary; past experience does not guarantee financing approval or deal outcomes for any specific acquisition.

See if your next acquisition will actually finance

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