SBA vs Private Credit: Which Financing Option Closes Faster?
In the lower-middle-market, time kills deals. By the time traditional lenders approve your loan, your competitor may already own the company you wanted. That’s why operators are increasingly comparing SBA loans vs private credit — two paths to the same goal, but built for very different speeds.
If you’re new to the acquisition financing landscape, start with our full guide on Business Acquisition Loans to understand how capital stacks are structured.
The Speed Gap in Today’s Market
Most entrepreneurs underestimate how long SBA underwriting really takes. Even well-prepared borrowers spend 45 – 90 days waiting for full approval, with multiple layers of documentation and government guarantees slowing the process.
Private credit lenders, on the other hand, work like dealmakers — not bureaucrats. They can issue term sheets within a week and close in two to three weeks if the business financials check out.
In competitive acquisition markets, that difference in speed is often the difference between winning and losing a deal.
How SBA Financing Works — and Why It Moves Slowly
The Upside:
- Low interest rates (typically Prime + 2.75%)
- Long repayment terms (up to 10 years)
- Down payments as low as 10%
The Trade-Off:
- Extensive personal guarantees
- Rigid eligibility criteria
- Government review adds weeks to the process
SBA loans are designed for stability, not speed. If your deal has a flexible timeline and you want low cost of capital, it’s a great fit. If you need to move fast — it’s a liability.
Private Credit: Speed, Flexibility, and Control
Private credit lenders specialize in customized debt structures for entrepreneurs who can’t wait for a committee.
Advantages:
- Speed: Indicative terms in days, funding in weeks
- Flexibility: Structure around cash flow and deal strength, not personal guarantees
- Control: You negotiate directly with decision makers, not layers of approvals
Considerations:
- Slightly higher rates than SBA loans (typically 10–14%)
- Shorter amortization periods (3–5 years average)
But for operators executing roll-ups or competitive add-ons, that speed often pays for itself in the form of closed deals and first-mover advantage.
When to Use Each Option
| Scenario | Best Option | Why |
| Buying a stable business with time to close | SBA Loan | Lower rates and long terms offset speed issues |
| Competing in a tight M&A timeline | Private Credit | Close in 2-3 weeks with flexible terms |
| Structuring with seller notes or investor equity | Hybrid Structure | Combine SBA + Private Credit for maximum leverage and liquidity — see our Business Acquisition Loans guide for a breakdown of capital stack design. |
How Aparti Capital Bridges the Two
At Aparti Capital, we don’t choose between SBA and private credit — we blend them. Our team designs layered capital stacks that balance cost of capital with execution speed. That means:
- Private credit for speed
- SBA for long-term stability
- Seller financing for alignment
Together, these pieces create a financing structure that closes quickly and scales smoothly.
To explore how different financing structures come together, read our comprehensive Business Acquisition Loans article.
Ready to Finance Your Next Deal?
Book a Capital Strategy Call with Aparti Capital and get a custom financing plan built for your timeline, cash flow, and growth goals.
