Access to capital and working with private equity

Starting, operating, and exiting. Starting capital funds the build or an acquisition, and usually comes from SBA 7(a) or SBA 504 loans and joint-venture or group structures. Operating capital funds day-to-day growth through supply-chain financing, factoring your receivables, or selling equity. Exiting capital is the sale itself, either a straight sale or a private-equity deal. The point of naming the stages is to match the financing to the need instead of reaching for whatever is nearest.

A 7(a) loan goes up to $5 million, carries a predominantly variable rate, and is the flexible option, covering acquisition, equipment, and working capital, with terms up to 25 years on real estate and shorter terms on working capital, and a down payment that starts at 10% but often lands at 20 to 30%. A 504 loan is built for fixed assets at a fixed rate: the SBA debenture goes up to $5.5 million, though a total project can exceed $20 million once you add the bank loan and your equity, with 25-year real estate and 10-year equipment terms and a 10% borrower down payment. In short, 504 for fixed assets at a fixed rate, 7(a) for flexibility. Confirm current SBA limits before you file, since they change.

Through three levers. EBITDA growth is earnings improvement sold at the entry multiple, and in healthcare that growth comes mostly from shared services like revenue-cycle management, EHR scale, and purchasing power. Multiple expansion is buying at one multiple and selling at a higher one on the same earnings. Debt paydown works like a rental property, where the company's own cash flow retires the acquisition debt and hands that value to the equity, without the sponsor adding more money. A good deal usually pulls all three, and the aggressive use of debt is what magnifies each of them.

By focusing relentlessly on cash flow and margin over a short hold, then improving operations across the platform. Common levers include reducing headcount, closing redundant facilities, eliminating unnecessary functions, divesting non-core assets, negotiating longer-term contracts, and expanding geographically. A good partner also brings things you cannot buy alone: quick access to capital when an opportunity appears, connections and inside information across the industry, conversations you would not otherwise get into, and the experience of having done this many times.

As a rough rule of thumb from what I see, most exits are straight sales, somewhere in the range of 60 to 70%, with private-equity deals making up the other 30 to 40%. That is my framing, not a hard statistic, and the mix moves by specialty and by cycle. The right answer for you depends on what you want after the close: a clean break, or a second bite through rollover equity and a few more years inside a larger platform.

Start with where you sit and where the money sits. Ask where the fund is in its life cycle, whether you are a platform or an add-on, how additional acquisitions affect your equity, and how much leverage the platform already carries as a multiple of EBITDA. Then ask about governance and your people: who is on the board, what board or minority rights you have, who you report to, what happens to key and family employees, and whether compensation philosophy changes. The full checklist is in this guide, and the answers tell you far more than the headline price.

Because their analysts work for them. A private-equity buyer arrives with sharper math than most owners have on their own side, and every number they build is built for their return. I am an independent fractional CFO, paid only by you. I take no fee, commission, or referral cut from any buyer, private-equity firm, or broker. My job is to get your numbers ready, help you read the deal terms from your side of the table, and make sure you understand the answers to those closing questions before you sign anything.