Business Financing Guides
Asset vs Stock Purchase: Tax & Financing Implications
For most SBA-financed acquisitions, asset purchases are the default and strongly preferred by lenders. Asset deals give buyers a step-up in basis, better depreciation, and cleaner liability protection. Stock purchases preserve licenses and contracts but transfer all liabilities. Regalis Capital structures nearly all deals as asset purchases. As of Q1 2026, the tax difference can exceed $100K on an $800K deal.
How Full-Standby Seller Notes Work in SBA Acquisitions
A full-standby seller note is a deferred loan from the seller that counts as equity in an SBA 7(a) acquisition. No payments are made during the SBA loan term, typically 10 years. Regalis Capital achieves full-standby terms on 90%+ of deals, pairing 5% buyer cash with a 5% seller note to meet the SBA's 10% equity injection requirement with minimal cash out of pocket.
SBA 7(a) vs SBA 504: Key Differences for Business Buyers
SBA 7(a) loans finance business acquisitions including goodwill, working capital, and real estate. SBA 504 loans finance real estate and equipment only, not goodwill or business acquisition costs. For most buyers, the SBA 7(a) is the right tool. According to Regalis Capital's deal team, 504 loans occasionally pair with 7(a) on deals with large real estate components, but they are not interchangeable as of Q1 2026.
SBA Equity Injection Explained: 5% Cash + 5% Seller Note
SBA 7(a) loans require a 10% equity injection, not a down payment. The standard structure is 5% buyer cash plus a 5% seller note on full standby acting as equity. On a $750K acquisition, that means $37,500 cash and a $37,500 seller note at 0% interest with no payments during the loan term. Regalis Capital achieves full standby seller notes on over 90% of deals.
SBA 7(a) vs Conventional Bank Loan for Business Acquisitions
SBA 7(a) loans require 10% equity injection (5% cash + 5% seller note on standby) versus 20-30% cash down for conventional loans. SBA offers 10-year terms and up to $5M; conventional loans typically cap at 5-7 years with stricter collateral requirements. According to Regalis Capital's deal team, SBA 7(a) is the right structure for most business acquisitions in the $500K to $5M range as of Q1 2026.
Seller Financing vs SBA Loan: Pros, Cons, and When to Use Each
For most business acquisitions between $500K and $5M, a hybrid SBA 7(a) loan plus a full-standby seller note outperforms both pure seller financing and a standalone SBA loan. Regalis Capital structures the majority of deals this way, achieving 0% interest seller notes on full standby in over 90% of cases. As of Q1 2026, SBA rates run approximately 10% to 11%.