Quick Notes

The SBA is back in business: With the federal government reopening on November 13, the SBA has resumed normal operations after a brief but disruptive shutdown period. Borrowers, lenders, and deal teams should expect a return to standard processing timelines, though there may be some residual backlog as the agency works through submissions that were paused during the closure. If you experienced delays during the shutdown and your transaction lost momentum, my team is ready to help you re-engage with your lender and get your deal back on track. The timing of government shutdowns is always unpredictable, but the good news is that the SBA has historically been quite efficient at clearing backlogs once operations resume.

Upcoming webinar: Pioneer Capital Advisory is partnering with Chris Barrett of Midwest CPA for a December webinar focused on the most critical financial reporting and tax considerations that business buyers often overlook before closing. Chris brings deep expertise in acquisition accounting and tax structuring for lower middle market transactions, and we'll be walking through the specific areas where buyers frequently make costly mistakes in their first year of ownership. We'll confirm the exact date soon and share registration details in next week's newsletter. If there are specific topics you'd like us to address during the session, feel free to reply to this email and let me know.

Recap of the 2025 Chicago ETA Conference

Last week I had the privilege of joining hundreds of searchers, operators, investors, lenders, and service partners at the 2025 Chicago ETA Conference hosted by the Booth-Kellogg Entrepreneurship Through Acquisition programs.

Pioneer Capital Advisory was proud to serve as a platinum sponsor, and it was encouraging to see the continued growth and sophistication of the ETA community as more talented professionals choose the search path as a way to build wealth and operational expertise.

In the weeks leading up to the conference, I had the opportunity to contribute a guest piece to the Polsky Center for Entrepreneurship and Innovation at the University of Chicago.

The article, titled "How First-Time ETA Buyers Can Navigate Today's Complex SBA Lending Market," outlined the shifting dynamics in SBA lending and the specific steps that first-time buyers can take to position themselves for success in an increasingly competitive financing environment.

The piece covered everything from personal credit requirements and equity injection expectations to the importance of building lender-ready documentation packages and understanding debt service coverage ratios before entering negotiations with sellers. If you missed it, you can read the full article on the Polsky Center website.

The conference itself provided an ideal opportunity to expand on many of those themes in a live setting.

I spoke on the self-funded search panel alongside:

• ​Sarah Andrews of Live Oak Bank​
• ​Aizik Zimerman of J. Blanton Plumbing​
• and Charles Miller of Cooper Demolition.

Our discussion centered on the long-term consequences of leverage decisions and how those choices create the conditions for either success or struggle in the first year of ownership.

The panel drew from each speaker's direct experience navigating the early stages of business ownership, and the conversation was particularly focused on the operational and psychological realities that new owners face when they're carrying significant debt loads while simultaneously learning to run a business for the first time.

One of the key themes we emphasized was the importance of avoiding excessive leverage at the time of acquisition. While maximizing leverage can seem appealing from a returns perspective, it often creates unnecessary financial pressure during the critical transition period when the new owner is still building relationships with customers, employees, and suppliers. Here are a few other key points made on this topic:

We discussed how searchers can set themselves up for success by overcapitalizing the balance sheet on day one, giving the business the liquidity cushion and safety margin necessary to weather the inevitable challenges of the early months of ownership.

Proper capitalization doesn't just protect against downside risk. It also:

• Fundamentally enhances the owner's operational flexibility by creating options that aren't available when every dollar of cash flow is immediately required to service debt.
• Strengthens the company's relationships with lenders and suppliers by demonstrating financial stability.
• And perhaps most importantly, it reduces the psychological burden on the new owner, allowing them to focus on learning the business and executing their growth strategy rather than constantly worrying about meeting debt obligations or managing liquidity constraints.

The feedback from both the Polsky Center article and the conference panel was overwhelmingly positive, and it's clear that the ETA community is beginning to think more carefully about the relationship between capital structure and operational success.

For buyers who are in the process of structuring their deals right now, I'd encourage you to think beyond simple leverage multiples and consider how your financing decisions will affect your lived experience as an owner during the first 12 to 18 months post-close. The technical work of getting a loan approved matters, but the strategic work of ensuring that your capital structure supports your long-term success matters even more.

Pioneer Capital Advisory Now Taking Mandates for Non-SBA Financing

Pioneer Capital Advisory has formally expanded into non-SBA financing for business acquisitions.

We remain focused on business buyers acquiring operating companies, but the capital structures we're arranging fall outside the SBA 7(a) program and typically involve conventional bank financing, asset-based lending, unitranche facilities, or mezzanine capital depending on the specific needs of the transaction.

Our ideal client profile for these engagements is a buyer pursuing a company generating at least $2 million in EBITDA, though we're seeing increasing appetite from lenders for transactions in the $3 million to $10 million EBITDA range.

Most of the buyers we work with in this area are experienced professionals with P&L leadership history or significant management experience at the divisional or business unit level. These are typically individuals who have spent 10 to 20 years building operational expertise in corporate environments and are now ready to deploy that knowledge in a business they own and control.

The non-SBA market operates quite differently from the SBA ecosystem, and buyers who are accustomed to the structure and predictability of SBA 7(a) financing often find the conventional market to be more complex and more variable in terms of credit appetite, pricing, and structuring flexibility. Lenders in this space tend to focus heavily on industry dynamics, business quality metrics, management depth, and the buyer's specific operational background. The underwriting process is more customized and requires a more sophisticated understanding of how lenders think about risk in the lower middle market.

Since most lenders in the non-SBA market do not pay referral fees to brokers, Pioneer Capital Advisory charges the sponsor directly for our work on these mandates.

Our fee structure is transparent and aligned with the complexity of the transaction, and we work on a success-based model where the majority of our compensation is contingent on closing.

Our team members leading this vertical are Pablo Redondo at pablo@pioneercap.com and Rafael Lopes at rafael@pioneercap.com.

If you're evaluating a business that's above the SBA size limits or if you simply want to explore what the non-SBA market looks like for your specific transaction, we'd encourage you to reach out and have a conversation with our team.

Recent Closings for Pioneer Capital Advisory Clients

We've seen strong closing activity across several industries as we approach year-end, and it's been particularly encouraging to see the quality and diversity of businesses that our clients are successfully acquiring. The transactions we're working on today reflect the broader trend in the ETA space toward more established, durable businesses with predictable cash flows and defensible competitive positions. Below are two recent transactions completed by Pioneer Capital Advisory clients that illustrate different approaches to structuring SBA 7(a) financings.

Metal fabrication acquisition​
A client recently closed on the acquisition of a metal fabrication business serving the industrial and commercial construction sectors. The transaction was financed using approximately $3.5 million of SBA 7(a) financing along with a $250,000 SBA Express Line of Credit, both provided by Pathward Bank. This structure is particularly well-suited for businesses with moderate working capital requirements and seasonal fluctuations in cash flow, as it provides the buyer with both the term debt necessary to complete the acquisition and the revolving credit facility to support day-to-day liquidity needs.

One of the key advantages of this approach is that the buyer entered ownership with immediate access to working capital flexibility, which is critical during the transition period when the business may experience temporary disruptions to customer payment patterns or inventory management. The SBA Express Line of Credit functions essentially as a safety net, allowing the new owner to manage short-term cash needs without having to request additional financing or inject personal capital during the early months of ownership. This is exactly the kind of overcapitalization strategy we discussed at the Chicago ETA Conference, and it demonstrates how thoughtful capital structuring can create meaningful operational advantages for new owners.

Countertops business acquisition​
Another client successfully acquired an established business in the countertops and custom fabrication sector using an SBA 7(a) loan of approximately $2.56 million. Truliant Federal Credit Union financed the transaction, and the legal work was completed by Eli Albrecht of Albrecht Law. This business serves both residential and commercial clients and has built a strong reputation for quality and reliability over more than a decade of operations.

This transaction continues the strong year-to-date trend we've observed of buyers acquiring established service companies with stable customer bases, recurring revenue streams, and durable earnings profiles. The countertops and custom fabrication industry has proven to be particularly resilient, with steady demand driven by both new construction and renovation activity. For buyers who are looking for businesses with tangible assets, predictable cash flows, and opportunities for operational improvement, service-based businesses in the skilled trades often represent an attractive combination of stability and growth potential.

Both of these transactions reflect the kind of work Pioneer Capital Advisory does best: helping experienced, thoughtful buyers structure financing that not only gets the deal closed but also positions them for success in the critical first year of ownership. If you're a business buyer currently working through a deal under LOI and would like guidance on navigating the capital markets, understanding lender appetite for your specific industry, or structuring your financing to maximize operational flexibility, my team is ready to speak with you. We've worked with nearly 100 clients since launching Pioneer in 2022, and we'd be honored to help you think through your capital strategy as you approach closing.

If you're buying a business, make sure to reach out to the Pioneer Capital Advisory team:

For pre-LOI buyers ready to explore opportunities: Schedule a meet & greet call​

Already have a deal under LOI and need financing help: Schedule an LOI consultation​

Whether you're beginning preliminary acquisition exploration or conducting due diligence on identified targets, we provide strategic guidance on financing options and lender introductions tailored to your specific circumstances.

Matthias Smith​
Pioneer Capital Advisory LLC

Disclaimer: The information in this newsletter is for informational purposes only and should not be considered legal or financial advice. Business buyers are encouraged to consult with their legal counsel and accountant to ensure the proper structuring of their transactions and to fully understand the tax implications of seller financing.

Thanks for reading! Feel free to reply directly to this email with any questions or thoughts.