Raise the capital to buy a business

Lenders asked for roughly 10 to 20% of the ask in net worth or liquidity, and prefer both together. On a $10 million acquisition that is about $2 million. Below that the deal is not dead: the equity gets syndicated from investors, or a co-GP partner brings it, and the sponsor still shows a first-loss cash position.

Sized off cash flow, never off the purchase price. That is the whole reason the rest of the stack has to be planned before the LOI is signed rather than after.

Advanced against equipment and inventory. A term loan and an asset-based line are two different lenders asking two different questions, so asset-heavy businesses can stack both.

Junior and unsecured, so it is paid after the bank. Sized on revenue rather than EBITDA, which is why it can exist on a business whose margin is too thin for a term loan. Price it into the model as 12 to 15% money, not as equity.

A seller note plus seller rollover equity reduced the cash needed at close on the July 2026 HVAC transaction and kept the seller invested through the transition.

On a roughly $5 million business doing $5 to $10 million of revenue. A thinner margin is not a rejection, it moves the deal toward asset-based or revenue-based money, which costs more.

DSCR is the ratio most first-time buyers have never computed before the bank asks. Compute it from the seller’s trailing twelve months before you sign anything.

If the target carries them, refinancing into a 6% facility is often the entire first year of return. Find them in diligence, not after close.

How do you raise money to buy a business?

You raise it in layers, and the layers are decided before the LOI rather than after. A senior lender sizes a term loan off cash flow at roughly 3x EBITDA. An asset-based facility advances 70 to 80% against equipment and inventory. Private credit sits behind the bank at 10 to 12% of yearly revenue, priced around 12 to 15%. A seller note and seller rollover close the remaining gap. Whatever is still short is the equity you raise from investors, and that equity needs a legal structure to accept it.

Can I buy a business without using my own money?

Not entirely, and a lender who is told otherwise stops underwriting. Lenders wanted roughly 10 to 20% of the purchase price in sponsor net worth or liquidity. What you can do is avoid writing that entire cheque yourself: the equity is syndicated from investors into a fund or SPV, or a co-GP partner brings the bulk of it while you hold the first-loss position. That is a structuring question, not a borrowing one.

What legal structure do I need to take investor money for an acquisition?

An offering that can accept outside capital. In practice that is a fund or SPV with a private placement memorandum, a subscription agreement and an operating agreement, sized to the exemption you are relying on, plus a financial model and a data room investors can actually read. Taking money before those exist is the expensive version of this mistake.

What does Raises.com actually build?

The structure and the materials: the fund or SPV, the PPM, the subscription agreement and operating agreement, a CFA-reviewed financial model, and the data room. Then debt and equity introductions run against that package. The work is the institution-grade structure that keeps you legally and financially safe while you raise, and pricing is published on the booking page before you book.

Do I need a signed LOI before talking to you?

No. Earlier is usually better, because the terms a seller asks for are the thing that decides whether a deal can be financed at all. Money down before an LOI, no diligence period and no financing contingency are the three that cost buyers the most, and they are cheaper to catch before they are agreed than after.

How long does it take?

It depends on the deal, the lender and how clean the seller’s financials are. A lender that quoted three weeks and took two months on a 2026 Texas HVAC close is the normal case rather than the exception, so the realistic answer is to build the timeline around lender reality instead of the seller’s preferred date.