A competitor is closing and will sell you the customer list and the equipment for $80,000. What funds it?

Buying a competitor's assets rather than the company itself — the equipment, the vehicles, the customer list, sometimes the phone number and the name — is the structure most small acquisitions take, because you get what you want and leave the liabilities behind. Lenders prefer it for the same reason: it is clean to underwrite. What it does not do is turn the customer list into collateral. A list is worth what the customers do next, and no lender values that.

The equipment. Trucks, mowers, a lift, a kitchen line, racking: each is an asset with a serial number and a resale market, and each finances over two to seven years with itself as security. A lender will want an appraisal or a dealer's valuation and a bill of sale, and the term will be shorter for older equipment. This part of the deal is the cheap money, and it can be a large share of the price.

The list and the goodwill. This is where the seller comes in. A departing owner carrying part of the price as a note, paid over two to five years from the revenue the customers generate, is the most common structure in small deals — it is cheap, and it means the seller has a reason to help the customers stay. Ask for it as a matter of course.

The balance. Whatever the equipment loan and the seller note do not cover, plus the working capital to serve the new customers for the first month before they pay, is a working capital loan on your own business's deposits: decision in about a day, funding in one to three business days, amounts around half to one and a half times a month's deposits.

A deal at $80,000 with equipment worth half of it and a seller carrying a quarter is a small-business acquisition that fast money can close in a week. A deal at $400,000 is an SBA or bank conversation: longer terms, lower rates, months of process, and a lender that will want the competitor's financials, a valuation and your own returns. We do not place those. For a deal that size, they are the right first call, and a short advance has one honest role in it — the down payment or the bridge to closing.

How many of the customers will come. A list from a competitor closing because the owner is retiring is worth more than one from a competitor closing because the customers left. A conversation with a few of the larger accounts before signing — with the seller's blessing — is the due diligence that decides whether the list is worth $30,000 or $3,000, and it costs nothing.