4 Deal Structures Demystified: What Pinellas Sellers Must Expect at the Closing Table
Very few business transactions close as 100% all-cash without contingent structures or seller participation. Understanding the capital stack helps owners negotiate terms that minimize risk.
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Cash at Close via SBA 7(a) Lending: The most common structure for Main Street and lower-middle-market sales in Pinellas County. Buyers inject 10–20% equity, while an SBA-backed lender funds the remainder at close.
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Seller Financing (Promissory Notes): The seller holds a subordinated note (often 10–25% of purchase price) amortized over 3–7 years. This reassures buyers and bridge loan gaps while generating interest income for the seller.
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Performance Earnouts: A portion of the purchase price is tied to future performance milestones over 12–36 months. Sellers should strictly define performance metrics to revenue, not net profit, to avoid accounting manipulation.
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Rollover Equity: Common in private equity recapitalizations. The owner rolls 10–30% of their equity into the new parent company, creating an opportunity for a “second bite of the apple” when the portfolio sells again later.
Discover how deal terms and buyer types vary across local industries by reading tactical articles on the Michael Shea Dealmaker LinkedIn Page.