Best Ways to Fund a Business Acquisition

Summary: Buying an existing business like a laundromat or HVAC service company can be a game-changing move—but figuring out how to fund that acquisition is crucial. As someone who has been in the trenches of small business deals, I’ll walk you through the best ways to finance your next acquisition, from SBA loans to seller financing, all while highlighting the most important factors in valuations. You’ll learn what I’ve seen work, what to watch out for, and how to structure deals that actually close. Whether you’re trying to value a laundromat accurately or need to understand deal financing, this guide has you covered.

My Experience with Acquiring Small Businesses

Over the past 15 years, I’ve bought, sold, and brokered dozens of small businesses—everything from mom-and-pop laundromats to mid-sized HVAC operations and niche service companies. Every deal I’ve ever been part of has started with the same question: “How are we going to pay for this?”

Figuring out how to fund an acquisition is the most important step, because without funding, a great deal stays just that—an idea.

When I acquired my first laundromat, I was nervous. I had read everything I could about cash flow, EBITDA multiples, and lease obligations, but nothing prepares you quite like signing a purchase agreement and wiring a sizable amount of your savings into escrow. That deal taught me more than any book could. Mainly, it taught me that funding your acquisition smartly can make the difference between a profitable investment and a money pit.

What You Need to Know Before You Fund a Business Acquisition

Before diving into financing options, let’s talk about why people love buying certain types of main street businesses—particularly laundromats and service companies.

These kinds of businesses are attractive for a reason. Laundromats, for example, tend to have highly predictable revenue, low labor overhead, and strong margins. HVAC businesses operate in sectors with durable customer bases and recurring revenue streams. What ties them together is their emphasis on net operating income (NOI), equipment maintenance, and consistency.

If you’re looking to value a laundromat correctly, or determine its worth during negotiations, rely on income-based metrics. The sellers will often try to tout gross revenue numbers, but seasoned buyers know better. We want to see earnings — typically SDE or EBITDA — and match those up with real-life market multiples.

Based on the most recent data from 2023 to 2025, here’s what I’ve seen across deals:

EBITDA multiples generally range between 3.44x and 4.85x for laundromat acquisitions.
SDE multiples are also reliable, falling between 3.16x and 4.23x.
Revenue multiples (less reliable, but often used) range from 1.19x to 1.78x.

Market pricing has been tightening up. Sellers are becoming more sophisticated and buyers more selective. I’ve seen deals where asking prices actually exceeded the fair-market valuation—and still closed. That tells you demand is still strong. But smarter buyers, like you, should always circle back to income and condition: Is the cash flow real? Is the equipment functional? Is the lease long enough to protect your investment?

With those essentials in mind, let’s shift gears to your funding options.

Top Strategies to Finance a Small Business Acquisition

1. SBA 7(a) Loans

Without question, the SBA 7(a) loan is the workhorse of small business acquisitions. More than half the deals I’ve closed in the last three years used some form of SBA-backed debt.

These loans are attractive because they allow up to 90% financing, with repayment terms up to 10 years. That long amortization schedule keeps your monthly payments manageable—even for cash-flowing businesses with moderate margins.

When I helped a client purchase a $1.6M laundromat last year, his loan package through the SBA allowed him to put down just 10%—$160,000—and finance the rest. The seller had clean books and solid EBITDA, and the buyer’s personal credit and industry experience were solid. That combination made underwriting smooth.

But SBA loans come with strict scrutiny:

You must show strong historical earnings—typically 2+ years of steady EBITDA or SDE numbers.
The business must show sufficient NOI to comfortably service the debt.
Personal guaranty is required, and in some cases asset collateral too.

Pro tip: Choose lenders who specialize in acquisition lending. Not all banks understand niche business models like laundromats or HVAC. A lender familiar with industry norms for laundromat valuation won’t balk at coin-counting systems or seasonal utility surges—they’ll know that’s business as usual.

2. Seller Financing

Seller financing is the unsung hero of deal-making. In my experience, roughly 30% of the transactions I facilitate include some element of seller carry.

Sellers who offer to finance part of the purchase—say, 10%–30%—not only sweeten the deal, but they also show confidence in the sustainability of their business.

One of my best deals came from a seller who offered 20% note financing after we went back and forth on a laundromat appraisal that was lower than his asking price. He agreed to meet me halfway with an SBA loan + seller financing stack. It was a win-win: he got close to asking, and I got a business I believed in with built-in support from the outgoing owner.

Seller notes also serve a valuable purpose: They make the seller less likely to misrepresent financials or hide looming problems. After all, they’re literally invested in your future success.

3. Conventional Term Loans

While SBA loans dominate the landscape, some banks and credit unions will offer conventional acquisition loans—typically to borrowers with strong personal or corporate credit, liquidity, and sometimes collateral.

These loans have faster closings and less federal formality, but interest rates can be higher, and down payments are steeper (think 20% to 40%).

I usually only suggest this route if the business is too unique or niche for an SBA underwriter, or if time is of the essence. Some HVAC or specialty service trades with limited documentation may fall in this zone, especially when seller trust and speed matter more than maximizing leverage.

4. Rollover for Business Startups (ROBS)

Want to fund a deal without taking on debt? ROBS lets you roll over your 401(k) or other retirement account into a business acquisition vehicle—without early withdrawal penalties.

While the IRS rules here are complex and require specialist firms, I’ve had at least three clients use ROBS successfully over the last few years—mainly former corporate employees with large retirement balances and a dream to ditch the 9-to-5.

This structure pairs especially well with cash-flowing laundromats, where solid NOI can yield attractive returns, and where growth comes from operational excellence rather than outsized marketing spend.

5. Investors or Partnerships

Finally, consider equity investors or partners for strategic deals. Maybe you’ve found a 3-location laundromat chain with aging equipment—but otherwise excellent EBITDA. You’ll need $300,000 for new washers and readers, plus acquisition capital. Bringing on a capital partner may be the best path forward.

Here’s the thing: Investors look at your track record, not just the deal. If this is your first acquisition, be prepared to show a deep plan—especially how you’ll manage lease risk, maintenance CAPEX, and working capital.

I’ve worked with investors who expect to see 3–5 year ROI plans, detailed cash flow breakouts, capital need forecasts, and more. It’s essentially a private placement—so bring your A-game.

Critical Due Diligence Factors That Impact Financing

Lenders and investors don’t just fund “good looking” businesses—they scrutinize the fundamentals. These are areas I remind all buyers to inspect, especially in laundromat and service business acquisitions:

Lease Terms

A prime location with a solid, renewable lease? That’s a green light for both buyers and lenders. A short-term lease with no renewal options? Huge risk. It can kill a financing deal overnight.

I once had a deal fall apart in underwriting when the underwriter realized the business only had 2 years left on the lease, and no written renewal clause. We tried renegotiating with the landlord, but by then the lender had already moved on.

Equipment Condition

If the business has outdated machines or deferred maintenance, that’s a capital burden waiting to happen—and lenders know it.

Modern card readers, energy-efficient washers, and reliable maintenance logs go a long way toward making your purchase look turnkey.

Be prepared to show:

Average age of equipment
Service records
Any recent upgrades or pending replacements

Plan for $60,000 to $500,000 in replacement costs if you’re acquiring a larger laundromat with older machines. That should factor into your purchase price and your financing plan.

Documented Financials

No matter how