Start with the use of funds
Hiring, an acquisition, a succession buyout, and working capital have different timing and risk. Separate one-time costs from recurring expenses. Build a month-by-month cash-flow view before discussing a loan size or a valuation multiple.
Compare the full structure
For debt, ask about rate changes, fees, guarantees, collateral, covenants, prepayment terms, and repayment timing. For equity, examine control, dilution, distributions, and exit rights. Platform capital may come with affiliation commitments. SBA 7(a) financing has eligibility and permitted-use rules; the lender determines whether a specific transaction qualifies.
Stress the repayment plan
Model lower revenue and slower client retention after an acquisition. Include taxes, transition costs, and owner compensation. A simple payment calculator excludes fees and cannot establish creditworthiness. Ask independent legal, tax, and financial professionals to review a proposed structure before signing.
Your next-conversation checklist
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These official sources support the concepts and provide current requirements. The practical workflow and questions are our editorial guidance.
General education. Your circumstances, agreements, and applicable rules matter. Review individual decisions with appropriately qualified professionals.
