SaaS Acquisition Financing: SBA Loans, Seller Notes, Earnouts

Few buyers pay for a SaaS business entirely in cash at closing. Most deals combine the buyer's own money with some mix of bank debt, a note from the seller and a payment tied to future results. Each piece changes the risk for both sides, so it is worth knowing what each one is before you write an offer.

Cash at closing

Cash is the simplest structure and the one sellers value most, because nothing depends on what happens after the sale. Even buyers who could pay all cash often keep some back as a seller note or an earnout, to share the risk that the business performs differently under a new owner.

SBA 7(a) loans

The U.S. Small Business Administration's 7(a) program guarantees loans made by participating lenders, and its published terms cover business purchases. From the SBA's own pages, read November 3, 2026:

• Use: "changes of ownership (complete or partial)" are a permitted use of 7(a) proceeds.
• Maximum amount: $5 million.
• Term: generally up to 10 years, and up to 25 years where real estate is financed.
• Maximum variable rates: the base rate plus 3.0% for loans over $350,000, plus 4.5% from $250,001 to $350,000, plus 6.0% from $50,001 to $250,000, and plus 6.5% at $50,000 or less.
• Guaranty: up to 85% of loans of $150,000 or less, and up to 75% of larger loans.

Sources: SBA 7(a) loans and 7(a) terms, conditions and eligibility. The guaranty protects the lender, not the buyer, and each lender applies its own credit standards. Ask early whether a lender finances software businesses, what equity it expects you to put in, and how it treats a seller note in the same deal, then confirm the current program rules with the lender.

Seller notes

A seller note means the seller is paid part of the price over time, with interest, instead of at closing. It lowers the cash you need and keeps the seller invested in a smooth handover. Everything about it is negotiated: the amount, the rate, the term, whether payments start right away and what happens if the business struggles. If a bank loan is also involved, the lender may set rules on when and how the note can be repaid.

Earnouts

An earnout makes part of the price depend on how the business performs after the sale, such as revenue or profit over the next year. It can close a gap between what the seller believes the business is worth and what the buyer can verify. It also causes most post-sale disputes, so define the measure exactly: which figure, from which system, over which period, and what the seller can and cannot influence once you own the business.

Putting a structure together

1. Start with what the business earns. Debt payments come out of profit, so the loan has to fit inside it with room to spare.
2. Decide how much of your own cash you want at risk.
3. Use a seller note or earnout to bridge the rest, and to keep the seller engaged through the transition.
4. Have an attorney and an accountant review the structure before you sign the letter of intent.

Test it on your own numbers

The free acquisition returns calculator shows what a purchase returns on the cash you put in, using your price, debt (seller note included), interest rate, repayment term, growth and exit multiple. It is arithmetic on your assumptions, not advice. Next, read how to buy a SaaS business step by step, or join the deal alerts to hear when matching listings open.