Creative Deal Structures Buyers Can Use

Buying a business is a little like ordering sushi (one of my favorites). You can stick with the basics—California roll and spicy tuna—and be fine. But if you’re a little more adventurous, you’ll discover there’s a whole menu of creative options that might just be a better fit for your taste (and your wallet).Most buyers think acquisitions always come down to a bank loan and a big check. That’s the “California roll” of deals—reliable, straightforward, but predictable. Sometimes that works, but other times, you need to get creative to close the deal. Here are a few specialty “rolls” buyers can use:

Earnouts: The “Prove It” Clause

An earnout is basically you telling the seller: “I’ll pay you the rest once I see this business actually does what you say it does.” Think of it like buying a car where the seller swears it gets 40 miles per gallon—you agree to pay them extra if you actually hit those numbers.

Why it works: Buyers lower their upfront risk; sellers get rewarded if performance holds.
Why it’s tricky: Define the metrics clearly—or you’ll be debating mileage forever.

Seller Financing: The Old-School Combo

Here, the seller becomes the bank for part of the price—usually 10–20%. It’s like them saying, “Don’t worry, I believe in this business enough to lend you money to buy it.”

Why it works: Bridges funding gaps and keeps the seller invested in your success.
Why it’s tricky: Terms, collateral, and interest rates matter. And here’s the kicker—if your business looks less “bankable” to a lender (say, uneven cash flow or messy financials), expect to rely more on seller financing to get the deal closed at a purchase price closer to what the seller wants.

Equity Rollovers: The “Stay in the Game” Roll

The seller keeps some ownership after the sale. You’re driving, but they’re still in the passenger seat—hopefully not giving directions every mile.

Why it works: Keeps the seller invested, reduces upfront cash needed, and smooths transition.
Why it’s tricky: Clearly define roles so the seller doesn’t show up with “new ideas” every Monday.

Contingent Payments & Royalties: Pay-As-You-Go

Instead of a flat price, payments scale with revenue or profit. Think of it like a buffet—you only pay more if you keep piling your plate.

Why it works: Flexible, performance-based.
Why it’s tricky: Agree on how to measure performance to avoid awkward “all-you-can-eat” disputes.

Assumption of Liabilities or Leases: Taking the Tab

Sometimes you take on certain debts, leases, or obligations instead of paying more upfront.

Why it works: Reduces cash needed at closing.
Why it’s tricky: Do your due diligence—some obligations are more like anchors than assets.

Joint Ventures or Partnerships: Try Before You Buy

You start as a partner, then buy out the rest later. It’s like dating before marriage—you test compatibility first.

Why it works: Builds trust and spreads out financial impact.
Why it’s tricky: If the “dating phase” feels like a bad reality TV show, the buyout won’t be smooth.

Combination Structures: The Sushi Boat

Most deals mix and match: SBA loan + seller financing + earnout, etc. Like ordering the boat—you get a little of everything, and it usually works out best.

Why it works: Flexibility and balance for both sides.
Why it’s tricky: More moving parts, so lean on your advisors (yes, that’s us).

Wrapping It Up

(Pun Intended)

Creative deal structures help buyers turn “I can’t afford this” into “Wow, I actually closed.” They open doors, reduce risk, and make sellers more comfortable.

So don’t be afraid to explore the whole menu. Deals—like sushi—are better when you mix it up.

And when you’re ready to roll (yes, another sushi pun), reach out to EDGE Business Advisors. We’ll help you find the deal structure that fits your appetite and your acquisition goals.

THE BUYER’S EDGE CLUB

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