When it comes to buying a Main Street business—think local service companies, small retail shops, or owner-operated trades businesses—many buyers assume Small Business Administration (SBA) loans are the only game in town. But that’s not always the case. Some deals simply don’t qualify for SBA funding due to the business’s tax returns, owner involvement, or industry type. Others may fall below the minimum size thresholds that SBA lenders prefer.
So, what do you do when SBA funding isn’t an option?
The good news: You still have options. Plenty of Main Street businesses sell every year without a single dollar of bank financing. Below are four common paths buyers use when SBA isn’t available.
1. Seller Financing: A Time-Tested Solution
Seller financing—where the current owner carries a portion of the purchase price—is one of the most common tools used in Main Street deals. Typically, the seller will carry 20% to 50% of the deal, paid back over 3–5 years with interest.
Why it works:
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It aligns the seller’s interests with the buyer’s success.
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It allows for a lower upfront cash requirement.
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It provides some peace of mind for the buyer, knowing the seller has skin in the game.
Pro tip: Always structure seller notes clearly with payment schedules, interest rates, and contingencies. Work with an attorney to protect both sides.
2. All-Cash Deals: Clean and Fast
If you’ve got the cash—or access to it—making an all-cash offer can put you in a strong negotiating position. Sellers love cash offers because they’re simple, fast, and low-risk. And you may be able to negotiate a lower price in exchange for quick, hassle-free closing.
When to consider it:
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The deal is under $200,000.
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You’re rolling over proceeds from another business sale.
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You want to avoid debt entirely.
Watch out for: Tying up all your liquidity in one deal. Retain enough capital for working capital, inventory, and any bumps in the road post-acquisition.
3. Hybrid Deals: Mixing Cash and Seller Notes
Most non-SBA Main Street deals use a hybrid approach: some cash down, with the rest financed by the seller. This gives buyers access to the business without overextending themselves and gives sellers some liquidity at closing.
Example:
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$300,000 purchase price
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$150,000 down
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$150,000 seller note at 6% over 5 years
Why it’s effective:
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Spreads the risk between buyer and seller
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Makes deals accessible to more buyers
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Keeps negotiations flexible
You can also get creative with earn-outs or balloon payments depending on how the business performs.
4. ROBS Program (Rollovers for Business Startups): Tap Into Retirement Funds
If you have a sizable retirement account (typically over $50,000), the ROBS (Rollover as Business Startup) program allows you to invest those funds into a business—without early withdrawal penalties or taxes.
How it works:
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You set up a C-Corporation.
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You roll over your retirement funds into a new 401(k) within the corporation.
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That 401(k) buys stock in the corporation, giving it capital to buy the business.
A trusted provider like Benetrends can guide you through the process to ensure compliance with IRS and DOL regulations.
Pros:
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No debt or interest payments
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Leverages your own capital
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Ideal if you’re exiting corporate life and want full control
Cons:
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Setup and compliance costs
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You’re putting retirement funds at risk, so due diligence is critical
Final Thoughts
SBA funding can be a powerful tool—but it’s not the only path to business ownership. Many successful Main Street entrepreneurs have bought their businesses using seller financing, cash, hybrids, or even their retirement savings.
If you’re evaluating a business where SBA is off the table, don’t walk away. Instead, work with an experienced business broker who knows how to creatively structure deals and guide you through the alternative financing options.
Buying a business is rarely a cookie-cutter process—but with the right strategy, you can still get the deal done.
Michael Shea represents the Central Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 400 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential.