If you're a founder considering an exit, it's critical to understand how buyers are financing their acquisitions — because how they buy will influence how you sell.

Whether you're speaking to a private equity group, a strategic buyer, or an individual operator, the structure of acquisition financing directly affects valuation, deal certainty, and payout timelines. As the M&A market evolves, business owners are best positioned when they understand how these debt instruments function across transaction sizes.

Common Acquisition Debt Structures by Deal Size

Why This Matters to Business Owners

Many owners assume the buyer’s funding is straightforward, but in reality, capital stack complexity influences closing risk, timing, and negotiating power. Here's how:

• If your deal is in the $1M–$5M range, expect SBA-backed buyers to be the most common, with timelines affected by underwriting and personal guarantees.
• For deals in the $10M–$30M range, private equity and mezzanine-backed groups become more common, allowing more flexibility on valuation, but often with complex term sheets.
• Earnouts are increasingly used to bridge valuation gaps, especially in digital businesses where trailing twelve-month performance is volatile or post-transaction integration is critical.
• If you're unprepared to answer due diligence requests from a lender, the deal may slow or stall altogether — even if the buyer is enthusiastic.

Understanding these capital sources not only makes you more informed but helps avoid surprises in the LOI and purchase agreement stages.