US acquisitions · buyer financing

How to buy a business with no money

"No money down" almost never means zero capital in the deal — it means using someone else's. Here are six real ways buyers do it, and exactly where each one tends to fall apart.

By John Warner, founder of BuyBuildSell · Last updated: September 2026

Every course and forum post promising "no money down" business acquisition is describing the same thing: structuring a deal so the capital comes from the seller, a lender, an investor, or your own retirement account — not your checking account. That's genuinely achievable. What isn't achievable is a deal with no capital at all; someone is always taking the risk. Here's how it actually works, and where buyers get burned assuming it's easier than it is.

1 Seller financing

The seller finances part — sometimes most — of the purchase price themselves, and you repay them over 3–7 years out of the business's own cash flow after you take over. It's the single most common way small deals actually get done in the US, because most Main Street sellers can't find an all-cash buyer anyway.

Where it breaks down: sellers who need the cash out at closing (retirement, another purchase, a divorce) won't do it. And if the business underperforms after you take over, you're still on the hook to pay someone who now has every incentive to watch you closely.

2 SBA 7(a) loan + seller note on standby

SBA 7(a) loans typically require a 10% equity injection from the buyer. But SBA rules allow a seller note placed on full standby (no payments at all for the loan's full term) to count toward that 10% — meaning if the seller agrees, you can sometimes close with little or none of your own cash while an SBA lender funds the rest.

Where it breaks down: not every seller will agree to full standby (they're waiting years for any return), and SBA underwriting is thorough — expect months of paperwork, and lenders still want to see the buyer has some relevant experience and isn't walking in with literally nothing to lose.

3 ROBS (Rollover for Business Startups)

If you have a 401(k) or old employer retirement account, ROBS lets you roll those funds into a new retirement plan that invests directly in the business you're buying — funding your equity injection without the usual early-withdrawal tax penalty. It's a real, IRS-recognized structure, not a loophole.

The catch that matters most: this is not free money. You're putting your actual retirement savings directly at risk. If the business fails, that money is gone the same way it would be if you'd withdrawn and spent it. Treat it with exactly the seriousness that implies.

4 Earnouts

Part of the purchase price is deferred and paid out of future performance — e.g. a percentage of profit over the next two years — instead of cash at closing. This shrinks the amount you need on day one and gives a nervous seller confidence the price reflects reality.

Where it breaks down: earnouts create built-in conflict — the seller wants aggressive numbers reported, you want to invest in growth that might depress short-term profit. Get the metric definition and dispute-resolution terms in writing, in detail, before you sign anything.

5 Outside equity partner

You find someone with capital who backs the deal financially while you run the business day-to-day — a silent partner, a small group of investors, or a "search fund" style backer. You bring the deal and the operating ability; they bring the down payment.

Where it breaks down: you're giving up equity and often control. A badly structured partnership can leave you doing all the work for a minority of the upside. Get this in a proper operating agreement, not a handshake.

6 Assuming existing business debt

Sometimes the purchase price is effectively reduced by having the buyer take over existing business liabilities (equipment loans, a lease, supplier financing) as part of the deal, rather than paying that portion in cash.

Where it breaks down: you need to know exactly what you're assuming and why it exists. Debt taken on for a bad reason (propping up a declining business) is a red flag, not a discount.

+ One wrinkle: if the deal includes real estate

A lot of Main Street businesses come bundled with the building they operate from — a laundromat, a restaurant, an auto shop. If the seller owns that real estate and wants to defer tax on it through a Section 1031 like-kind exchange (rolling the proceeds into another property instead of paying capital gains now), that changes what they can accept for the real estate portion specifically. A 1031 exchange requires the sale proceeds to pass through a neutral third party (a "qualified intermediary") — the seller can't touch the cash, which generally rules out them also carrying a seller note on that same property.

The practical takeaway: if real estate is a meaningful chunk of the price, treat "buy the business" and "buy the building" as two separate negotiations. The business might work well with seller financing while the real estate gets a straight purchase-money loan or its own structure — especially if the seller has told you they care about deferring their gain on the property.

Where it breaks down: if you're counting on seller financing for the real estate and the seller is counting on a 1031 exchange for that same piece, those two goals directly conflict. Only real property qualifies for 1031 (not the business itself, equipment, or goodwill), and the timing rules are strict — sort this out with everyone's advisors early, not at the closing table.

The real skill isn't finding "no money down" — it's structuring

Every strategy above is a way of answering one question: who takes the risk if this doesn't work out? A seller note shifts risk to the seller. SBA debt shifts it to a lender (and to you, personally, since SBA loans are typically personally guaranteed). ROBS shifts it onto your own retirement. An equity partner shares it. None of them make the risk disappear — they just decide who's holding it, which is exactly why getting the deal terms right matters more than getting a bigger discount on price.

Before you get deep into structuring financing, you need a real number for what the business is actually worth — not the seller's asking price. That's the first thing to nail down, before you negotiate anything.

Start with a real valuation

Run the target business's numbers through the free SDE calculator, then get the full add-back checklist to sharpen the estimate before you start structuring an offer.

Try the calculator → What is SDE? →

Frequently asked questions

Can you really buy a business with no money down?

Rarely with zero capital anywhere in the deal. What's usually meant is using little or none of the buyer's own cash — funding the purchase through seller financing, SBA debt, ROBS, or outside investors instead. The capital still comes from somewhere; it just isn't your personal savings.

What is seller financing?

The seller acts as the lender for part or most of the purchase price, and you repay them over time — typically 3–7 years — out of the business's own cash flow after closing.

How do SBA loans help buy a business with less cash?

SBA 7(a) loans typically require a 10% equity injection. A seller note on full standby can sometimes count toward that 10%, letting a buyer close with little or none of their own cash if the seller agrees.

What is ROBS and is it risky?

ROBS lets you use retirement funds to fund a business purchase without the early-withdrawal penalty. It's legitimate, but it puts your actual retirement savings at risk if the business fails — it is not free money.

Related: US business valuation calculator · Seller's Discretionary Earnings explained.