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.
What's the Best Business to Buy? Highest-ROI, Recession-Resistant SMBs (2026)
The best business to buy combines recurring revenue, hard assets, and demand that holds in a downturn. Car washes trade near 5.8x cash flow (SDE), self-storage near 4.6x, and laundromats near 4.0x, well above the 2.7x median for all small businesses (BizBuySell, Q1 2026). The highest-ROI categories share three traits: the revenue repeats, it does not walk out the door with the owner, and people still pay for it when money is tight.
The Complete Guide to Buying a Business with an SBA 7(a) Loan (Sourcing to Close) (2026)
The SBA backed roughly 70,000 7(a) loans in FY2024 at an average of about $443,000 each, and a clean acquisition closes in 60 to 90 days once under agreement (SBA, FY2024; industry aggregators). Buying a business with an SBA 7(a) loan is a six-stage process: source a target, vet and value it, structure the financing with a 10% equity injection, sign an LOI, run due diligence and lending in parallel, and close. The most common path needs only 5% genuine cash down.
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 the vast majority 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.
How Much Cash Do You Actually Need to Buy a Business? (2026 Guide to the Current SBA Rules)
To buy a $350,000 business with an SBA 7(a) loan you need a 10% equity injection of $35,000 (SBA SOP 50 10 8, effective June 1, 2025). At least half, $17,500, must be your own non-borrowed cash; a seller note on full standby can cover the other $17,500. Budget closing costs and a working-capital cushion on top, and plan to keep 10% to 20% liquid after close.
How to Buy a Car Wash (2026 Guide)
Car washes carry the highest asking multiple in the small-business set, averaging about 5.8x SDE on a 3.0x to 3.5x typical range, with a median asking price of $1,400,000 on $202,170 of median cash flow (Regalis deal-aggregate analysis, 2026). A financeable price tracks closer to a conservative 4.7x verified SDE. With an SBA 7(a) loan you put in 10% of total project cost, at least 5% genuine cash, and recurring wash-club memberships are what carry the debt-service coverage.
How to Buy a Laundromat (2026)
A typical laundromat costs about $500,000 and sells for roughly 4.0x cash flow (SDE), one of the highest Main Street multiples, with most deals landing in the $200,000 to $500,000 range (Regalis deal-aggregate analysis, 2026). That premium reflects equipment value and steady demand, not hands-off income. The two things that make or break a laundromat deal are verifying real cash revenue and confirming the lease and equipment will transfer.
How to Buy a Self-Storage Facility (2026)
Self-storage facilities sell at roughly a 4.6x cash flow (SDE) multiple and target a 7% to 12% cash-on-cash return (Sundance Financial, 2025). You can finance one with an SBA 7(a) or 504 loan on a 10% equity injection (SBA SOP 50 10 8). The deal lives or dies on rent-roll diligence: verified occupancy, true street rates, and the gap between economic and physical occupancy.
How to Buy an Assisted Living Facility (2026 Guide)
Assisted living facilities sold at a median asking price of $1,500,000 on $338,924 of median cash flow in 2026, a 3.7x SDE multiple (Regalis deal-aggregate analysis). The multiple runs from roughly 3.2x to 3.7x and swings widely with state license type and bed count. The value lives in occupancy: lenders underwrite around an 80% census, and a state license must transfer before you can close.
How to Buy an HVAC Business (2026 Guide)
HVAC businesses sell at roughly a 2.9x cash flow (SDE) multiple, with a median asking price near $794,500 on $261,553 of SDE (Regalis deal-aggregate analysis, 2026). Do not confuse that with the 8x EBITDA a private equity roll-up might quote. Recurring maintenance contracts earn a premium, most states require a licensed person to hold the contractor's license, and an SBA 7(a) loan funds about 85% with a 10% buyer injection (5% genuine cash plus a 5% full-standby seller note).
The Letter of Intent That Actually Closes (2026)
A clean small business acquisition closes in 60 to 90 days once a signed LOI puts the deal under agreement (industry aggregators). The Letter of Intent sets price, deal structure, a 60 to 90-day exclusivity window, and the contingencies that protect the buyer. Most of an LOI is non-binding, but exclusivity, confidentiality, and the timeline usually are. A weak LOI is the most common reason a deal dies before it ever reaches a lender.
Quality of Earnings: Do You Need One?
A Quality of Earnings (QoE) report costs $10,000 to $30,000 and exists to prove a seller's stated cash flow is real before you overpay. Sellers routinely pad earnings with soft add-backs that inflate SDE by 15% to 50%, so on a six-figure deal a QoE often pays for itself. You do not always need a formal QoE, but you always need someone to do the verifying.
SBA 7(a) Deal Structure Explained (Points, Equity Injection, Standby, Guaranty Fee) (2026)
Under SBA SOP 50 10 8 (effective June 1, 2025), an SBA 7(a) business acquisition is built on a 10% equity injection, of which at least 5% of total project cost must be genuine non-borrowed cash. On the $350,000 median deal (BizBuySell, Q1 2026) that is $35,000 down, the SBA finances about 85% to 90%, and a full-standby seller note can cover the rest. Any 20%-plus owner signs a full personal guarantee.
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 the vast majority of deals.
SBA 7(a) vs Conventional Bank Loan for Business Acquisitions
An SBA 7(a) acquisition loan needs a 10% equity injection (commonly 5% buyer cash plus a 5% full-standby seller note), versus 20% to 30% cash down for a conventional bank loan (SBA SOP 50 10 8, effective June 1, 2025). SBA 7(a) runs 10-year terms up to $5M; conventional acquisition loans typically cap at 5 to 7 years with stricter collateral. For most cash-flow deals in the $500K to $5M range, SBA 7(a) is the structure that actually closes.
Seller Financing & Seller Notes Under the New SBA Rules (2026 Guide)
Under SBA SOP 50 10 8 (effective June 1, 2025), a seller note counts toward your equity injection only if it is on full standby for the entire life of the loan, and only up to 50% of the required 10% injection (a 5% maximum). The old 24-month standby rule is obsolete. Most small business sales still include a seller note, but its SBA treatment now hinges entirely on full standby.
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 the vast majority of cases. As of Q1 2026, SBA rates run approximately 10% to 11%.
The Small-Business Due Diligence Playbook (2026)
Due diligence on a small business acquisition typically runs 30 to 45 days inside a 60 to 90 day close once you are under agreement. The job is simple to state and hard to do: prove the cash flow is real before you wire any money. Sellers routinely inflate SDE with soft add-backs, so discount a stated cash flow figure by 15% to 50% until every line is verified. This playbook is the checklist.
What Is My Business Worth? SDE & EBITDA Multiples by Industry (2026)
The typical small business sold for $350,000 in Q1 2026 at a 2.7x cash flow (SDE) multiple (BizBuySell). Your business is worth its adjusted cash flow times an industry multiple, most commonly 2x to 6x SDE. A laundromat trades near 4.0x and an HVAC company near 2.9x. The real number depends on your add-backs, recurring revenue, and what a lender will finance.