Introduction
Buying a business is one of the most exciting — and challenging — steps an entrepreneur can take. Whether you’re acquiring your first company or expanding through multiple acquisitions, one thing remains constant: the right financing can make or break the deal.
At Yaw Capital, we specialize exclusively in business acquisition financing. That means we understand what lenders are looking for, how to structure deals correctly, and how to guide buyers through every stage of the process. In this guide, we’ll walk you through everything you need to know about how to finance a business acquisition in 2025.
Why Business Acquisition Financing Is Different
Acquisition financing isn’t like applying for a credit card or taking out a car loan. These are complex, structured transactions that require lenders to evaluate:
- The business being acquired (its cash flow, revenue, growth potential).
- The buyer’s background and ability to run the company successfully.
- The capital stack — how much equity the buyer is putting in vs. how much debt is requested.
- The repayment structure, terms, and lender protections.
Because of these factors, buyers need the right partner to present their deal in the best light to lenders. That’s where Yaw Capital comes in.
Common Ways to Finance a Business Acquisition
There are several proven models for financing acquisitions. Each comes with pros, cons, and specific use cases.
1. SBA Acquisition Loans (7(a) & 504)
- Loan Size: Up to $5 million
- Best For: Entrepreneurs acquiring small to mid-sized businesses
- Benefits: Lower down payments (10–20%), longer repayment terms (up to 10 years), and flexible use of funds
- Challenges: Lengthy approval process and strict documentation requirements
At Yaw Capital, we specialize in navigating the SBA process quickly and efficiently. Our clients consistently close SBA-backed deals that banks alone could not approve.
2. Traditional Bank Loans (Senior Debt)
- Loan Size: $5 million+
- Best For: Established buyers with strong credit and acquisition targets with proven cash flow
- Benefits: Competitive interest rates, larger deal sizes
- Challenges: Banks are conservative — deals often require significant collateral and equity injection
3. Mezzanine & Hybrid Capital
- Loan Size: $5M–$50M+
- Best For: Middle-market and upper mid-market acquisitions
- Benefits: Flexibility, creative structuring, often used for roll-up strategies
- Challenges: Higher cost of capital, but enables deals that otherwise wouldn’t close
4. Private Capital & Equity
- Loan Size: $10M–$250M+
- Best For: Larger acquisitions, private equity-backed deals, family office roll-ups
- Benefits: Strategic partners bring more than capital — they provide industry expertise and growth support
- Challenges: Dilution of ownership, longer negotiation timelines
The Step-by-Step Acquisition Financing Process
At Yaw Capital, we guide buyers through a clear 4-step process to secure financing:
- Prequalification – Quick assessment of buyer profile and acquisition target.
- Lender Match – Introductions to lenders most likely to approve the deal.
- Financing Package – Structuring financials, projections, and documents for approval.
- Closing – Negotiating final terms and securing funds for acquisition.
This process is designed to minimize wasted time and maximize approval success.
FAQs About Acquisition Financing
How much equity do I need to finance a business acquisition?
Most lenders expect 10–25% equity from the buyer, depending on deal size and risk.
Can I finance 100% of a business acquisition?
Rarely. Most acquisitions require some level of buyer equity to align interests. However, with SBA loans and seller financing, effective leverage can come close to 90–95%.
How long does acquisition financing take?
SBA loans can take 45–90 days, while traditional and private deals may move faster depending on lender appetite and deal readiness.
The 2025 Financing Outlook
With interest rates still high but stabilizing, 2025 is shaping up to be a strong year for acquisition financing. SBA programs remain a powerful tool for entrepreneurs, while private capital and hybrid debt solutions are filling gaps for larger deals.
Buyers who prepare properly, align with the right partners, and move quickly will be best positioned to take advantage of acquisition opportunities
Conclusion
At Yaw Capital, business acquisition financing is all we do. From $500K SBA-backed acquisitions to $250M capital market transactions, we bring the expertise, lender access, and deal structuring skills you need to succeed.
If you’re planning to buy a business in 2025, don’t leave your financing to chance. Partner with the specialists who know how to get deals done.
