How to Buy a Business With No Money Down: What Works in 2026

The short answer: You can’t buy with literally $0 of anyone’s money. A first acquisition with an SBA loan now needs 10% equity. Your own cash can be as low as 5% if the seller carries the other 5%. Getting to $0 of your own cash means an investor puts it in, and they’ll own part of the business.

You can take over a $2 million business that earns $500,000 a year with about $110,000 of your own money. That’s not a YouTube trick. It’s the standard SBA structure Mark Fleming’s firm uses on almost every first deal. What did stop working is the version the videos sell: zero down. That ended on 1 October 2026.

This post is for the person still in a corporate job, with some savings, wondering whether buying a business is realistic. It mixes what Mark told us on Inside Micro PE (he has closed more than 20 acquisitions and advised on about 40 through his firm, Owner Actions) with the current SBA rules and our own numbers, so you can work out what you’d actually need.

How much cash do you actually need?

On a 5%-down SBA deal, your own cash is 5% of total project cost: the purchase price plus about 10% for closing costs and working capital. That is about $55,000 on a $1M business, $110,000 on $2M, $165,000 on $3M and $275,000 on $5M.

*Price plus about 10% for closing costs and working capital. Real figures vary by deal.

**Our calculation: a 10-year SBA loan at about 10%, at the 1.25x debt coverage the SBA now requires. “Earnings” means cash profit (EBITDA) after paying someone a market salary to run the business.

Two things the table tells you. Your cash needs scale with the deal, so pick a deal size that matches your savings before you start looking. And the business has to earn enough: at a typical price of 4 times earnings, a $2M business earns about $500K, which clears the $393K bar.

Rule of thumb: every $1M you borrow needs about $200,000 a year of earnings to get past the bank.

Why did “zero down” stop working?

Because the SBA rulebook changed. The version that applies to loans from 1 October 2026 caps seller notes and other borrowed sources at half of the 10% equity, requires the change of ownership to close in one go, and generally rules out earnouts. That removed the structures sold as zero down.

The SBA’s 7(a) loan program funds most small US acquisitions. Its rulebook (called the SOP) changed twice in 18 months. The newest version applies to loans from 1 October 2026.

The “zero down” structures still advertised online mostly relied on things that no longer work in an SBA deal:

• Stacking seller notes to cover the whole 10%. Now capped at half.
• Phased buyouts, where you buy the business in stages. The full change of ownership now has to close in one go.
• Earnouts, where part of the price depends on future results. These are generally not allowed in SBA-financed purchases.
• The seller keeping a slice. A seller who keeps any stake is treated as an owner and must personally guarantee the loan, which has made this structure rare.

How does a 5% down SBA deal work?

The SBA loan covers 90% of the project, you put in 5% in cash, and the seller carries 5% as a note on full standby, so no payments or interest are due until the SBA loan is repaid. Here’s the structure Mark’s firm uses on almost every first deal:

1. The SBA loan covers 90% of the project.
2. You put in 5% in cash.
3. The seller carries 5% as a note on full standby: no payments and no interest paid until the SBA loan is repaid, usually 10 years later.

On a $2M business earning $500K a year:

$110,000 of your money buys control of a business earning $500,000 a year. That’s the math that pulled Mark out of hedge funds. At 4 times earnings, a business pays back 25% of its price every year, and the financing costs under 10%. In his words: “It’s a pretty nice spread with a low down payment.”

How do you get the seller to agree to a standby note?

Present the note as the part of the price the seller collects as the business keeps performing, not as a delay. Mark Fleming’s firm, Owner Actions, agrees the full asking price first and calls the note a bonus. The seller still receives about 95% at closing.

This is where most first-time buyers get stuck. A note with no payments for 10 years doesn’t sound like money to a seller.

Owner Actions agrees the full asking price, then presents the standby note as the part the seller collects as the business keeps doing well. Why it lands:

• The seller still gets about 95% at closing. The note is the last 5%, not the bulk of the price.
• It keeps the seller invested in the handover. Money still owed is a reason to make the transition work.
• It’s honest. The note is only paid once the bank is repaid, so it really does come out of the business’s future success.

How you might say it (our wording, not Mark’s): “We’re paying your full price. About 95% arrives at closing. The last 5% is paid as a bonus once the bank loan is cleared, out of the business you built.”

Be straight that it is a loan, not a gift. Then get these in writing:

• The interest rate on the note (it usually builds up while payments are paused)
• What happens to the note if you refinance the SBA loan early
• That the note sits behind the bank, on the SBA’s standby form

Where can your 5% come from?

Your 5% has to be real money, but it doesn’t all have to be savings. Lenders generally accept savings, a documented family gift, ROBS retirement funds, a home equity loan with conditions, and a passive investor owning under 20%. Here’s the detail:

*ROBS (Rollover as Business Startup) lets you invest 401(k) or IRA money in your own company without an early-withdrawal penalty.

Check your lender’s list before you count on any of these. Each bank applies the rules a little differently.

Can you really put in $0? Buying with your resume

Yes, but only with someone else’s equity. Owner Actions runs a fund that will put in the full down payment for some buyers. Mark calls it buying with your resume:

His bar: 10 to 15 years of work experience, at least 5 of them managing people or selling, and experience in the industry you’re buying into.

Here’s how the routes compare:

What if you skip the SBA loan?

You can ask the seller to finance the deal directly, but it isn’t low-down. Sellers typically finance a third or more of the price, so buyers put down about a third or more, on a loan of 5 to 7 years. In detail:

• Sellers typically finance a third or more of the price, and BizBuySell suggests buyers put down at least a third.
• Seller loans usually run 5 to 7 years at around 8% to 10%, so the payments are much heavier than a 10-year SBA loan.
• Earnouts are back on the table, which can bridge a gap on price.

On a $2M business, that’s roughly $660,000 down instead of $110,000. Mark thinks every country should copy the SBA, and this is why: it’s the reason a US buyer can get in at 5%.

Will the bank approve it? Run the stress test

Low equity means a big loan, so the bank’s test is the one that decides your deal.

On the $2M example, the loan costs about $314,000 a year. Here’s what happens if earnings come in lower than the seller’s numbers:

Our calculation: 10-year loan at 10% (prime of 7% plus the SBA’s 3-point maximum on loans over $350,000).

The price matters as much as the earnings. Pay 5 times earnings ($2.5M) instead of 4 times for the same $500K business, and coverage drops to about 1.27x. One negotiation point is the difference between a comfortable deal and one that barely clears.

Mark’s warning about life after closing makes the same point. A typical seller earns about $1 million and lives on about $150,000, so a $50,000 leak doesn’t hurt them:

Which deals work with 5% down?

Mark’s sweet spot is $2M to $10M, with most deals between $2M and $5M.

• Under $2M: often too small to run without the owner. Mark’s own first deal, a cleaning franchise bought at about 2x earnings, was subscale, and he says he wouldn’t repeat it.
• $5M to $10M: possible by adding a regular bank loan alongside the SBA loan (a “pari passu” loan, up to about $3M more).
• $8M to $20M: an “air pocket.” Too big for SBA-led financing, too small for most funds.

What should you do this week?

Mark’s advice for someone still in a job: go to the listing sites, look at everything, and ask honestly which businesses you’d be the right owner for. “The seller is going to choose who they want to buy.”

Then:

1. Find your number. Add up savings and any of the sources above, then divide by 5%. That’s your ceiling for total project cost. $110K gets you to about a $2M business.
2. Check the earnings bar. Shortlist businesses that earn about $200K a year for every $1M you’d borrow.
3. If the cash isn’t there, your resume is the pitch. Write down why you’d be the CEO an investor would hire.

Watch the full conversation

Mark went much further on Inside Micro PE: what happens after the wire clears, why cash collection slows in the first 90 days, why brokers stiff-arm first-time buyers, and why he thinks every country should copy the SBA.

▶ Watch: Inside Micro PE with Mark Fleming on YouTube