Shaun | The Financing Guy

🎉 My 2025 resolution: Sharing insights from my firm CapFlow, where we connect business borrowers to the best-fits of our 500+ lenders. Our two verticals I'll be posting about: 1) SBA 7(a) and 504 financing $1m - $5m 2) Conventional financing $1m - $30m Also these 3 financing purposes we specialize in: 1) Acquisitions 2) Working Capital 3) Growth So hit that follow button to get smart about the financing markets and M&A, plus modern strategies to source and analyze deals via content, automation, and AI. Happy New Year! 🎉

A $30M specialty distribution business came to us last week. They needed $500K for a new location. The trap was set 12 months earlier. They closed their acquisition a year ago. SBA loan plus conventional debt. Solid structure on paper. What they didn't have: a line of credit. Now they need growth capital. Their original lender won't expand. And the blanket lien from the SBA loan blocks any other bank from stepping in. The line of credit you didn't get at closing is the one that holds you hostage a year later. Here's the playbook when you're already in this spot: 1. Ask your current lender to expand. They might say yes if the deal is performing. 2. If they decline, demand a lien carve-out in writing. You can't get capital anywhere else without it. 3. Once you have the carve-out, shop the LOC to other lenders. Real lesson though: build the LOC into the ORIGINAL stack at closing, not as a year-later fix. Most buyers find out about this trap the year they actually need it. Ever been blocked by a blanket lien you didn't fully understand? What did your original lender say?

There's a federal loan program with higher caps and longer amortization than SBA. Most borrowers don't know it exists. It's USDA B&I, the Business & Industry Loan Guarantee Program. Run through USDA Rural Development. Same federal-guarantee mechanic as SBA 7(a), different rule set. The comparison most borrowers never run: SBA 7(a): - Loan cap: $5M - Guarantee: 75% - Amortization: 25 yr real estate, 10 yr business - Eligibility: All US USDA B&I: - Loan cap: $25M (up to $40M with additional approval) - Guarantee: 60-80% (tiered by loan size) - Amortization: 30 yr real estate, 15 yr equipment, 7 yr working capital - Eligibility: Rural areas (typically population under 50K) The catch is rural eligibility. But "rural" includes a lot more than people assume. Plenty of $7M to $25M acquisitions in small-city and exurban markets qualify. Borrowers default to "I'm SBA or I'm out" without ever checking. Defaulting to "SBA or conventional" when your deal exceeds $5M is leaving real options on the table. Two practical notes: - The same non-bank shops that run SBA divisions often have B&I divisions. Easier transition than starting from scratch. - Even partial-rural eligibility can work if the borrower has rural-region roots or the operating address sits in a qualifying zone. If your deal exceeds the $5M SBA cap or sits in a rural market, USDA B&I might fit. Want to know if your deal qualifies? DM me, email me, or set a call at our CapFlow website.

The single CIM page that flipped a "tariff risk" deal into an underwriting positive. A specialty industrial components manufacturer came to us last quarter. ~92% USA-sourced raw materials. The original CIM treated sourcing as boilerplate, one line buried in the operations section. We rebuilt that page. In 2026, lenders are pricing tariff exposure into LMM deal underwriting. If your inputs are USA-sourced and your CIM doesn't make that the lead story, you're leaving real credit room on the table. What we put on the page: 1. Geography pie chart. 92% USA, 6% Canada, 2% other. One image, immediately scannable. 2. Supplier concentration. Top 5 USA suppliers and their state breakdown. Lenders want resilience, not just geography. 3. Pricing-power proof. 6 months of margin data showing tariff pass-through. Not just "we have pricing power" but actual data. Lender response: the tariff narrative shifted from a flagged risk to a positive credit factor. The geography page became one of the most referenced sections of the CIM in underwriting calls. The bigger point. In 2024, sourcing geography was background. In 2026, it's a primary credit factor. The CIMs that don't lead with it are getting marked down by default. Sourcing geography matters more in 2026 than it did in 2024. Need help positioning your CIM for the rate environment? DM me, email me, or set a call at our CapFlow website.

What lenders actually evaluate when they ask "how much are you putting down?" isn't the down payment. The down payment question is the surface. Below it, lenders are asking a completely different question: how much will you have left when something goes wrong? Equity injection is table stakes for SBA. 10% minimum. Below that you're not eligible. Above that, the marginal dollar doesn't make the deal more financeable. It just depletes your runway. The buyer who shows up with a smaller down payment and $250K in post-closing reserves is more underwritable than the buyer who maxes out their cash to look strong on paper. Here's why. Banks know two things about Year 1: 1. Something will go wrong. A customer will leave, a key hire won't work out, an inventory cycle will surprise you. 2. They don't want to be the one funding the bailout. So they look at post-closing liquidity. Typical ask: $100-250K of cash on hand after closing. The fix: - Don't max out personal cash at the closing table - Use a larger seller note (especially a full-standby tranche) to bridge the equity gap - Keep $100-250K in a buffer account, separate from the operating business - Show the lender the buffer in your pre-close projections Trying to figure out how much equity to put down without leaving yourself dry? CapFlow helps buyers structure financing that protects post-closing cash. DM me, email me, or set a call at our CapFlow website.

Your seller's adviser is using the wrong formula to inflate the seller's rollover. You're not crazy. They're wrong. Here's the setup. You negotiated a 25% rollover. Off an $18M enterprise value, that's a $4.5M stake for the seller going forward. Then the seller's adviser shows up post-LOI and applies "leverage math." Suddenly the seller's stake isn't 25% of the deal anymore. It's 60-90%. And yours just collapsed. The math they're using is real. But they're applying it to the wrong base. They take the seller's $4.5M dollar amount and reframe it as a percentage of the POST-DEBT equity in the cap stack, not enterprise value. After leverage, equity in the cap stack is far smaller than EV. So $4.5M as a slice of a smaller pie balloons to a much bigger ownership percentage. Yours shrinks proportionally. That's not how LMM rollovers are typically valued. They're sized on total enterprise value, period. The adviser is dressing up a renegotiation as theoretical finance. The fix: 1. Push back. The 25% means 25% of the equity going forward, sized off EV. Cite the LOI. 2. If they won't budge, swap the rollover for a 5-year full-standby seller note. Functions like equity to the senior lender. No EV-versus-equity math fight. 3. For your next deal: spell out the basis in the LOI. "25% of enterprise value" closes the door before this trick gets played. Have you ever had a third-party adviser sink an LMM deal with bad math? What was the calculation they tried?

A senior BDO at a top-50 SBA bank reached out last week to tell me he was leaving. The reason wasn't comp. His head underwriter had quietly transitioned a month earlier. The new lead changed the credit box overnight. Deals that were sailing through a quarter ago started getting picked apart on borrower experience, transaction structure, the works. Three of his term sheets went cold inside 30 days. The BDO didn't change. The bank didn't change. The brand on the building didn't change. But the underwriting did. Here is the pattern I hear about constantly: → Head underwriter changes first → Credit box tightens or shifts → BDO morale tanks because their pitch no longer matches reality → BDOs leave 60 to 120 days later By the time most borrowers notice, they have already burned 30 to 45 days on a process that was never going to close. The BDO is the brochure. The head underwriter is the bank. We track the underwriting layer at 125+ SBA lender relationships, not just the BDO names on a list. When a head credit officer transitions, that lender comes off our active matching list until the new posture is clear. Knowing about the change before the BDO does is the entire point. If your deal has been "in committee" for three weeks and your BDO is suddenly hard to reach, that is a signal. Not paranoia. If your deal is stuck and you want to know whether it is the bank or the underwriter, DM me, email me, or set a call at our CapFlow website. When you have had a deal stall at term sheet, did you ever ask who the head credit officer was?

Your private credit lender isn't one lender. And that matters when you want to refi. When a shop quotes you a unitranche, you see one credit agreement and one rate. Behind that document, two lenders are at work. The shop has pre-sold a senior tranche to a bank or BDC, kept the junior tranche on its balance sheet, and stacked them inside one facility. This is First-Out / Last-Out (FO/LO) tranching, and it is a common LMM structure in 2026. Here is the math: → First-Out (FO) tranche: 40-60% of the facility, priced at SOFR + 275-450, sold to a bank or senior credit fund → Last-Out (LO) tranche: 40-60%, priced at SOFR + 700-1100, kept by the private credit shop → Blended rate: what you see in your quote The blended rate is real. The two lenders behind it are also real, and they have different motivations. Where it matters: 1. Refinancing flexibility. Your shop may want you to refi. The bank holding the FO tranche may not, because their loan is performing and they are running off floating-rate exposure. 2. Covenant defaults. In a stress event, the FO holder controls senior remedies. The LO holder gets paid second and may push for a workout the FO holder will block. 3. Prepayment economics. The LO tranche often has higher call protection than the blended rate suggests. Prepaying year 2 can carry a make-whole that nobody mentioned at signing. Three questions to ask before signing a unitranche: 1. What is the FO/LO split, and who holds the FO tranche? 2. What does call protection look like specifically on the LO tranche? 3. In a covenant default, who has senior remedies? If your advisor cannot answer these clearly, you are not getting institutional advice. You are getting marketing. CapFlow negotiates against FO/LO structures all the time. If you are about to sign a unitranche and want the structure walked through before you commit, DM me, email me, or set a call at our CapFlow website. LMM borrowers, when you signed your last unitranche, did your advisor explain the FO/LO split?

A management team came to us this week worried about a sell-side process. The owner was retiring. He had been talking to investment bankers about running a full sale. The two senior managers, who had run the business for 12 years, did not want a stranger walking through the door six months from now to ask how the sausage was made. They came to us asking if they could realistically buy the business themselves. We showed them the time math. A full sell-side process for a $4M EBITDA manufacturing business takes 9 to 12 months in 2026: → 3 months of CIM prep and pitch → 3 months of buyer outreach → 3 months of bidder diligence and LOI selection → 3 months of buyer financing and closing A management buyout closes in 2 to 5 months. No CIM. No bidder shopping. No competitive process. The buyers know the financials cold and can run financing day-one. Both processes end at the same place: bank appetite caps the price. The end-state offer in a sell-side gauntlet isn't 25% higher. It is bounded by what an SBA lender or non-bank ABL will finance against the same EBITDA. The bidders are competing inside a bank-defined ceiling. If the offers converge anyway, the only thing the sell-side adds is time and risk. That was the negotiating wedge: 6 months of certainty for the owner, no risk of a strategic bidder dropping out at month 7, no broker fees on his side. We modeled the deal at the financeable price, set up the financing in parallel, and the owner agreed in two weeks. If you are a management team facing this conversation with your owner, time-to-close is your strongest pitch. Not "we deserve it." Just math. If you are running an MBO and need a financing assessment fast, CapFlow can run it in a couple days. DM me, email me, or set a call at our CapFlow website. Owners considering retirement, what would you actually pay for 6 months of certainty?

A construction CEO called me this week. Four banks had passed on his working capital line after reviewing AR aging. The deal was perfect. Just not for them. Construction has the most misunderstood receivables in commercial banking. Three patterns trip up generic working capital lenders: → Retention receivables: 5 to 10% of every contract is held back until completion. On the AR aging that looks like 90+ day past due. To a generic lender, that looks like collection problems. → Work in progress (WIP) billing: revenue is recognized before invoicing. To a generic lender, that looks like accounting fiction. → Progress billing milestones: receivables come in lumps tied to project phases. To a generic lender, that looks like cash flow lumpiness, not contract reality. A specialist construction ABL lender looks at the same balance sheet and sizes a $4-8M facility against contract backlog and progress billing patterns. A generic lender sees risk and bounces. Same balance sheet. Different lender. Different outcome. The four banks that passed on this CEO weren't wrong about the underwriting fundamentals. They just don't underwrite construction. Most banks don't lose money on construction. They just don't know how to underwrite it. Those are different problems. If your bank wants to see "AR aging cleaned up" before they will increase your line, that bank doesn't understand your business model. Three signals you are talking to a construction-specialist ABL: 1. They ask about retention treatment in your contracts 2. They want to see your contract backlog, not just AR 3. They quote advance rates on a contract-by-contract basis, not a blanket percentage If you are a construction owner and your working capital lender does not understand WIP billing or retention, CapFlow knows which ABL specialists actually close construction deals. DM me, email me, or set a call at our CapFlow website. Construction owners, has a lender ever told you "we don't lend against retention"?

Which profit metric is most important to lenders? It depends on the size of your business. 🧵👇

🎯Ever wondered about ALL your options for business financing? It's not just banks! Here's a quick breakdown: 🧵👇

@aryanXmahajan PITCH

I built a Gamma skill that writes enterprise pitch decks. In 3 minutes it does what my $15K designer took 10 days for. → No more $2K retainer per designer brief → No more 48h turnarounds and 4 rounds of revisions → No more 10-day latency between pitch intent and deck delivery → No more losing deals because the clock ran out → No more generic templates VCs have seen 50 times Just one prompt → custom 30-slide enterprise pitch deck in 3 minutes. Here's how it works: → ChatGPT Memory Integration (pulls 6 months of client calls, positioning, pricing logic) → Skill Architecture (hits Gamma API directly, no manual slide building) → Narrative Generator (custom story per prospect, not recycled templates) → Case Study Pull (surfaces real wins from past call transcripts) → Brand Voice Layer (decks sound like you wrote them, not an AI) → 12-Prompt Playbook (launch, refine, repurpose, repitch) Built on ChatGPT Connector infrastructure. Runs on your own business memory, not generic prompts. 3-minute deck generation. 0 designer dependencies. Results from 11 days of deployment: - $45K retainer closed on first deck sent - $180K total pipeline closed - 3 more prospects decked in the same week - 0 revisions across all 4 decks The job isn't making better decks. It's killing the 10-day gap between intent and close. Reply "PITCH" + repost, I'll DM the skill + 12-prompt playbook.

Two SBA lenders looked at the same acquisition this month. One offered 10% more leverage because of the real estate. The other offered less. Same deal. Same financials. Same buyer. The difference was philosophy. Lender A treats owner-occupied real estate as bonus collateral. They see a building inside an acquisition and they like the deal more. They will stretch on the operating company because the building gives them comfort. Lender B treats real estate as a separate problem. The building doesn't make the operating loan more collateralized, it just makes the total loan ask bigger. Bigger ask, same operating cash flow, less comfortable. Neither lender is wrong. They are running different playbooks. Here is what most searchers miss: your real estate inclusion question isn't about your deal. It is about which lender you are sitting in front of. The fix is asking three questions BEFORE you finalize structure: 1. Do you treat owner-occupied real estate as additional collateral, or as additional debt? 2. Will my operating company DSCR change if I include the building? 3. If we go 504 on the real estate, does that change your view on 7(a) coverage on the operating company? If you get the same answer from every lender, you have a clean structure decision. If the answers diverge, you are picking lenders, not picking structures. If you are bouncing between three lenders giving you three different answers on real estate, CapFlow can predict which one is going to land where. DM me, email me, or set a call at our CapFlow website. Searchers, has a lender ever flipped their answer on real estate inclusion mid-process?

@Aidanb2b VAULT

Lead magnets have generated my clients & I 1,000s of leads in the last few months. I just put 600+ of the most VIRAL ones into 1 swipe file. (yes. 600) ​ Because by FAR the no. 1 reason most people don't make lead magnets work.... ...they just don't know WHAT to post. ​ They KNOW lead magnets are absolutely dominating the algorithm right now. You just don't know: A) what format works in your niche. B) what asset to build. C) what the actual post is supposed to look like. ​ So you sit on it. Months go by. ZERO leads. ​ 500+ people grabbed my last swipe file. This one's 3x bigger: → 600+ WINNING LM posts across social platforms → 12 B2B niches Cold Email, Sales, SaaS, Agency, Marketing, Recruiting, Finance, Consulting, AI, Content, Ecom, Fundraising → Filterable by format (Playbook, Template, GPT, Spreadsheet, Framework, Guide, Database) → Tagged by hook type (Competency, Contrarian, Dream Selling, Personal Story) → Engagement metrics on every post... likes, comments, reposts → Direct link to every single one ​ All you've got to do: 1. Filter your niche. 2. Steal the format. 3. Ship. ​ Comment "VAULT" and I'll DM you the link. (must be connected) PS Repost this and I'll ALSO include: - my 5 viral AI lead magnet prompts to speed up the creation process - my ENTIRE lead magnet masterclass course - my full lead magnet template swipe file (copy / paste frameworks)

**Big-name SBA lenders in retreat.** The 3-4 banks every searcher learned to call in 2024 are NOT the right lenders to target in 2026. They over-lent through the last cycle. Took losses on deals that should never have been underwritten. Now they cherry-pick only the cleanest deals and pass on the rest. Here's what I'm hearing in the market right now: → One of the big-name SBA lenders has a pattern of issuing term sheets and then blowing up the deal in week 6 of underwriting. Buyers lose the LOI and start over. → Another has virtually stopped all acquisition financing. The name is still on everyone's list. The deals aren't closing. → Frustrated BDOs and SBA managers are leaving the big names for regional banks, non-bank SBLCs, and credit unions that are actually writing loans. The loan officer who did your friend's deal in 2023 probably isn't at the same shop anymore. → The remaining loan officers still pitch on the same intro calls. Leadership quietly told them the credit box shrank. If you're running your deal to the list your community built two years ago, you're going to waste 8 to 12 weeks before you figure it out. The lenders actually closing SBA deals in 2026: 1. Non-bank SBLCs, including groups that recently bought SBA licenses and are growing aggressively 2. Regional banks quietly expanding their SBA books, most of whom never show up in search-fund Slacks 3. A handful of credit unions with national reach that want good acquisition deals right now We run live financing campaigns across 125+ active SBA lenders every month. We see who's approving, who's stalling, and who's retreating, in real time. Your target list shouldn't be 18 months old. If you're about to sign an LOI and you're not sure which lenders are actually viable on your deal, happy to take a look. DM me, email me, or set a call at our CapFlow website. Which "big name" has burned you this year, and who actually funded the deal?

🤔 What does private equity know about business acquisitions that searchers should always keep in mind? They know the key to a successful acquisition is properly aligning incentives. That includes the new owners, the sellers, and most importantly the key employees. Here's the simple formula we used to incentivize key employees when I was in PE: ➡️Immediate equity grants (typically 5-10% split among key leaders) ➡️4-year vesting schedule with a 1-year cliff for that equity ➡️Quarterly performance bonuses tied to concrete metrics For small business deals, I've seen this work well with even higher equity percentages - sometimes up to 20% for truly irreplaceable leaders. Remember: Owning 80% of a growing pie is better than 100% of a shrinking one. I've seen small business owners create simple but powerful structures using: ➡️Quarterly and annual cash bonuses tied to individual performance ➡️Annual profit-sharing pools ➡️"Sweat equity" and performance-based paths to ownership Remember, you're not just buying a business - you're partnering with the people who built it. This matters even more in small business deals where relationships are everything and a few key people make the whole thing go. 🎯Takeaway: Always Be Aligning (ABA) incentives in business. Whether it's a PE mega-deal or a local business acquisition, success comes down to making key people feel like owners, not employees. ❓Question: What methods have you seen to align employee incentives in business acquisitions?

Have you ever seen a business loan that requires paying MORE when you're doing WELL? We recently received a bank term sheet for a $15m acquisition which included a "cash-flow-sweep." These are common in conventional bank and private credit acquisition financing. Think of it like a profit-sharing agreement with your lender. Here's how it works: 1️⃣Your business has a great year and generates $2 million in "excess" cash flow 2️⃣Your loan agreement requires 50% of excess cash to be "swept" toward principal 3️⃣Result: $1 million goes to pay down loan principal, $1 million stays with your business Why do lenders love this? ➡️Reduces their risk by capturing upside performance ➡️Accelerates paydown when you're most able to handle it ➡️Aligns incentives between lender and borrower From the business's perspective: ▶️Less flexibility with excess cash ▶️BUT: Faster debt reduction = lower interest costs ▶️AND: Often leads to better loan terms upfront Pro Tip: In negotiations, focus on the sweep threshold and percentage. The right structure lets you retain cash for growth while giving lenders comfort on repayment. Bottom line: Cash flow sweeps can be a win-win when structured properly. Just make sure you understand how they'll impact your growth plans. Want to discuss your financing options at no cost? DM or email me (in bio).

Want to understand how a step-up" works for equity financing in small business acquisitions? Here's the quick explanation, removing deal fees to make the math simpler. Assume a $5m purchase price with a $1m seller note, so you need to cut a check at closing for $4m. You get an SBA loan for $3.5m. Now you need $500k in equity to complete the capital stack. If you raise this $500k equity from outside investors at a 2.0x "step-up", what does that mean? First divide the $500k outside investor equity by the total capital stack of $5m, and you get 10%. Take this 10% and multiply it by the 2.0x step-up to get 20%. So at a 2.0x step-up, these outside investors will own 20% of the company, and you the buyer will own 80%. At a 1.5x step-up, the investors will own 15% of the company (10% * 1.5), and you the buyer will own 85%. Right now "the market" is 2.0x step-up plus a 10% preferred return (more on this in another post) for small business acquisition equity. Of course it's negotiable. Contact me if you'd like to discuss the financing for your small business acquisition. Question: What step-up and overall terms are you seeing in the equity financing market for small business acquisitions?

**Here's where SBA rates are actually landing this week.** Got an SBA rate check-in from one of the more competitive lenders we work with. Sharing because rate snapshots are worth more than rate averages. These are relationship-priced ranges on approvable scenarios. Your actual quote will depend on credit, collateral, deal type, and how that lender's credit box feels about your sector right now. As of mid-April 2026: Business Acquisitions (non-RE) → 10-year fixed: ~8.0% to 8.25% Commercial Real Estate, SBA 7(a) → 10-year fixed: ~6.0% to 6.25% → 25-year fixed: ~6.0% to 6.5% Commercial Real Estate, SBA 504 → 10-year fixed: ~5.5% to 6.0% → 25-year fixed: ~6.0% to 6.5% Three things to notice: 1. The gap between business acquisition rates and CRE-backed rates is roughly 200 basis points. Real estate collateral pays for itself. 2. Between 7(a) and 504 on the same CRE deal, the 504 blended rate usually comes in meaningfully cheaper on longer amortizations. 3. Rates vary by lender. These ranges reflect one of the more aggressive SBA shops we've been active with. More conservative shops will price 50+ basis points higher for similar deal profiles. If your term sheet is 50+ bps above these ranges without a clear reason, you're not seeing the market. You're seeing one lender's quote. Drop the deal structure and we'll give you a read on whether you're in-market or getting gouged. DM me, email me, or set a call at our CapFlow website. Where does your SBA term sheet sit, in these ranges or above?