Small Business Acquisition Financing
Small-Business Acquisition Financing: A Practical Guide for iGaming Entrepreneurs
Buying an established operation – whether a Malta-licensed sportsbook platform or a Romanian affiliate network – requires both capital and creativity. Experienced acquirers rarely rely on a single funding source.
Instead, they blend personal cash, seller support and third-party leverage to reach an optimal structure that protects returns yet keeps incentives aligned. Below is a concise field guide to the four funding pillars that dominate sub-$5 million transactions, followed by sample deal structures, an FAQ and a balanced look at the advantages and drawbacks of each route.
At-a-Glance Comparison
| Funding Source | Typical Buyer Cash In ($) | Amortisation / Term | Prevailing Rate* | Speed to Close | When It Shines |
|---|---|---|---|---|---|
| Personal equity | 10 % – 100 % of price | n/a | Opportunity cost | Immediate | Highly fragmented deals where speed trumps leverage |
| Seller note | 30 % – 60 % cash down | 3-7 yrs | 6 % – 10 % | 30-45 days | When buyer track record or niche licence narrows bank appetite |
| SBA 7(a) loan | 10 % – 20 % equity | Up to 10 yrs | Prime + 2-3 pts | 60-90 days | U.S.-domiciled assets with stable cash flow and clean compliance |
| 401(k) ROBS | Up to 100 % via rollover | n/a | Debt-free | 45-60 days | Buyers with large retirement balances but limited liquidity |
*Ranges reflect June 2025 market data.
1. Buyer’s Personal Equity
Most acquirers inject at least 10 % of the purchase price from savings, liquid portfolios or a home-equity line. Besides signalling commitment to lenders and sellers, a healthy cash slug reduces overall leverage—a point worth noting in higher-volatility verticals such as casino affiliate marketing.
Pros
Immediate availability keeps negotiations moving.
No covenants or third-party oversight.
Interest cost equals zero; return depends on exit multiple.
Cons
Concentrates personal risk.
Limits scalability if multiple properties are targeted.
2. Seller Financing
Roughly one-third to two-thirds of today’s sub-$5 million deals include a seller note, with surveys showing participation anywhere from 27 % to 70 % of transactions depending on sector and region. In iGaming, it is particularly common when the asset relies on the owner’s licence or exclusive traffic sources.
Sellers typically accept interest of 6 %–10 % with a three- to seven-year amortisation and may subordinate the note to any bank loan. Because the seller remains economically exposed, they are incentivised to facilitate licence transfers and post-close introductions – valuable currency in tightly regulated markets.
Pros
Fewer formalities—often a three-page note and personal guarantee.
Keeps the seller “on the hook,” reducing information asymmetry.
Can be combined with SBA or ROBS to lower blended cost.
Cons
Shorter amortisation inflates monthly debt service.
Not every seller is willing (or able) to carry paper.
Larger cash down payment (frequently ≥ 40 %) remains necessary.
3. Bank & SBA 7(a) Financing
In the U.S., about 95 % of bank-funded acquisitions under $5 million rely on the SBA 7(a) guaranty. Current guidelines allow as little as 10 % buyer equity, although many lenders still ask for 15 %–20 % on digital assets with limited tangible collateral. Rates float with Prime—currently placing most acquisition loans in the mid-single to low-double digits.
While the paperwork is real – business valuation, buyer résumé, three-year projections and a personal liquidity test—the reward is a ten-year term that smooths cash flow and often eliminates the need for a large seller carry. Note that the SBA excludes businesses deriving more than one-third of revenue from gambling; thus, a U.S.-facing betting operator itself seldom qualifies, but an EU-licensed affiliate or B2B platform usually can.
Pros
Lowest monthly payment due to 10-year amortisation.
Government guaranty frees up bank credit appetite.
Combines seamlessly with seller notes or ROBS rollover cash.
Cons
Closing costs run 3 %–4 % including guarantee fee.
Process may stretch to 90 days and hinges on detailed compliance.
Variable rates expose buyers to future hikes.
4. 401(k) Rollover as Business Start-up (ROBS)
A ROBS lets entrepreneurs redeploy retirement funds into C-corp stock without triggering tax or early-withdrawal penalties, effectively turning pre-tax savings into equity capital. Providers such as Guidant or Benetrends report survival rates north of 80 % at four years, beating SBA benchmarks. Still, the IRS labels ROBS “questionable,” meaning strict procedural compliance—and annual plan audits—are mandatory.
Pros
Zero debt service maximises early-stage cash flow.
No credit score or collateral requirements.
Can serve as the cash injection required by an SBA lender.
Cons
Entire retirement nest egg is placed at business risk.
Requires C-corp structure and ongoing plan administration fees.
Missteps invite costly IRS scrutiny.
Common Deal Structures
| Structure | Cash | Seller Note | SBA / Bank | Comments |
|---|---|---|---|---|
| All-cash | 100 % | — | — | Rare; used when licence transfer timing is critical. |
| Seller-led | 50 % | 50 % | — | Popular on fast-close, under-$1 million deals. |
| SBA-centric | 20 % | — | 80 % | Most efficient for U.S. targets with steady EBITDA. |
| Hybrid | 10 % | 10 % | 80 % | Balances incentives while minimising equity burn. |
In practice, professional buyers start with SBA pre-qualification, pivot to a seller note when underwriting hurdles appear, and weave in ROBS cash only if liquidity or tax optimisation dictates.
Frequently Asked Questions
How much personal cash should I expect to commit?
For mainstream U.S. targets, plan on 10 %–20 % if SBA financing is available; double that if you rely primarily on a seller note.
Is seller financing negotiable in regulated gaming?
Yes—many licence holders prefer gradual payout to mitigate recapture risk, but regulators may require escrow or stepped-transfer structures.
Can I use crypto gains as equity?
Converted fiat is acceptable; lenders will want a documented paper trail and proof of tax compliance.
Does the SBA fund offshore iGaming ventures?
No. The 7(a) program restricts businesses with significant gambling revenue; however, ancillary B2B or marketing assets can qualify.
What’s a realistic closing timeline?
Cash or seller-only deals close in 30-45 days; SBA-backed transactions average 60-90 days due to appraisal and underwriting queues.
Final Thoughts
Securing the right capital stack is as much art as science. In today’s market of elevated but flattening rates, the optimal playbook begins with an SBA term sheet for U.S.-located assets, layers in a moderate seller carry to bridge valuation gaps, and taps retirement funds only when other low-cost equity is exhausted.
Executed properly, this blended approach limits downside, aligns seller motivation and preserves dry powder—critical advantages whether you are rolling up esports data feeds or diversifying into white-label slots.
