Take Five #162: How SBIC funds work, why they could fuel your next SMB deal, and more
Top five must-reads this week in the world of SMB acquisitions and operations
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Take Five #162: How SBIC funds work, why they could fuel your next SMB deal, and more
1. ETA Deal Team Day NYC 2025 Wrap-Up: 120+ search pros, sharp insights, powerful industry connections (and Kumo CEO Jason Pratts spotted in the wild as an event speaker)
2. HoldCo CEO role rundown with a look at the “allocator vs. operator” approach
3. Lender explains how new SBA changes impact deal structures with seller notes and equity positions
4. How SBIC funds work and why they could fuel your next SMB deal
Using SBIC Financing for Business Acquisitions
SBIC financing offers small business buyers a powerful way to tap into the extensive network of Small Business Investment Companies (SBICs). These organizations collectively manage significant assets dedicated to acquisition opportunities. Since their creation, SBICs have invested over $100 billion into small businesses, demonstrating their ability to support acquisitions in industries like manufacturing, technology, healthcare, and business services. What sets SBICs apart from traditional lenders is the flexibility they provide. They offer financing structures that can include debt, equity, or a mix of both, tailored to the unique needs of each deal. This adaptability not only boosts the available capital but also creates opportunities for strategic acquisitions.
Using SBIC Funding to Improve Deal Sourcing
SBIC-backed firms have a competitive edge when it comes to deal sourcing, thanks to government-leveraged returns designed for the lower-middle market. Through the SBIC program, buyers can access up to a 2:1 funding match, enabling them to pursue larger acquisitions than they might otherwise afford. SBICs typically focus on mature, profitable businesses with strong cash flow, making them ideal for buyers targeting established companies rather than startups.
5. Podcast Interview: From busted boilers to big exits; how HomeServe quietly built a $6B subscription machine
In this HoldCo Builders episode, PrivatEquityGuy Mikk Markus and RoleUp Europe’s Alex Prokofjev discuss how HomeServe transformed from a small-scale plumbing outfit into a stacked subscription machine. They also talk about pivots, playbooks, and profit levers behind the scenes.
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