SBA Loans To Buy A Distribution Company
In FY2026, SBA lenders made 35 loans totaling $51.5 million to buy existing wholesale distributors, an average of $1.5M per acquisition. Buy a distribution company with as little as 10% down. We take your deal to the SBA lenders that fit, from our network of 50+, and it costs you nothing.
Based on SBA 7(a) data through September 30, 2026. Acquisition loans are SBA 7(a) loans to businesses recorded as a change of ownership.
The Distribution Company Acquisition Market
Distributors and rental companies carry inventory or equipment and serve repeat business customers. Lenders look at supplier agreements, inventory or fleet quality, receivables and working capital.
Distributors sell on supplier lines, customer relationships and logistics. GoSBA has closed distributor deals in HVAC supply and building products.
Acquisitions made up 37.7% of all SBA 7(a) dollars lent to wholesale distributors in FY2026, compared with 27.4% across all industries. Buying an existing business is one of the main reasons owners in this industry use SBA loans, so lenders here see a steady flow of acquisition files. The average acquisition loan was $1.5M, about 19% above the $1.2M average for business acquisitions nationally. Across every purpose, lenders made 179 SBA 7(a) loans for $137 million in the industry, with an average loan of $763K and a median of $250K.
11% of those loans went to startups or businesses under two years old and 2% to franchises. By dollars, Texas, California and Florida led the industry. Loan count was down 27% from FY2025, partly because FY2026 had no October 2025 approvals during the federal shutdown, so it covers about 11 months. Wholesale distributors rank #46 of the 77 industries in our buy a business by industry guide by number of acquisition loans.
Based on SBA 7(a) data through September 30, 2026.
SBA Loans In This Industry By Size
All SBA 7(a) loans to wholesale distributors, FY2026.
What It Costs To Buy A Distribution Company
There is no single price for a distribution company. The loan follows the cash flow. The most common SBA loan size in this industry was $150K to $350K, while the most dollars went to loans of $2M to $5M. Acquisition loans ran larger than the industry average of $763K because they finance goodwill as well as equipment, inventory and working capital.
At the industry’s average acquisition loan of $1.5M, and a loan covering 90% of the project, the typical total project is about $1.6M, which includes the purchase price, working capital and closing costs. 21 loans in the industry, 57% of the dollars, were between $2 million and $5 million.
What you can borrow is set by earnings, not the asking price. SBA requires the business’s cash flow to cover all debt payments at least 1.25 times for an acquisition, measured on historical results. An independent business valuation must support the price on purchases above $350,000; if the price is higher than the valuation, the gap is filled with more buyer cash or a seller note on full standby.
Larger deals carry extra steps. When the Business Purchase Price, not counting real estate, is $3 million or more, SBA requires a Quality of Earnings report. The SBA 7(a) loan tops out at $5 million, and bigger purchases pair it with a conventional loan in a pari passu structure.
How Much You Need Down To Buy A Distribution Company
SBA requires a Down Payment of at least 10% of the total project cost on the purchase of a business, and the lender cannot reduce or waive it. You do not have to bring all of it in cash.
Up To Half From The Seller
A seller note can count for up to half of the Down Payment if it is on full standby, with no principal or interest payments for the life of the SBA loan. That means as little as 5% from you.
Your Savings, Gifts Or Retirement Funds
Cash that is not borrowed counts, including gifts and money from retirement accounts. Many of our buyers use a retirement funds structure.
Investors
Minority investors can fund part of the Down Payment. Anyone who owns 20% or more of the buyer personally guarantees the loan.
Example: A Distribution Company At The Industry Average
| Total project (price, working capital, closing costs) | $1,635,000 |
| Down Payment (10%) | $164,000 |
| From the seller (note on full standby, max half) | Up to $82,000 |
| From you (cash, gifts, retirement funds, investors) | From $82,000 |
| SBA loan | About $1,472,000 |
Built from the $1.5M average acquisition loan for wholesale distributors in FY2026. Based on SBA 7(a) data through September 30, 2026. Illustration only; your lender sets the final structure, and some lenders ask for more than 10%.
Get A Pre-Qualification Letter Before You Make An Offer
Sellers and brokers move faster with buyers who can show they are financeable. Our letter takes a few minutes to request.
What Lenders Look For In Wholesale Distributors
Distributors sell on supplier lines, customer relationships and logistics. GoSBA has closed distributor deals in HVAC supply and building products. Beyond the industry specifics, every SBA acquisition is judged on the same core questions.
Supplier Agreements
Exclusive lines and territories are often the core of the value. They must survive the sale.
Inventory Or Fleet Quality
Inventory turns or rental fleet utilization show how productive the assets are.
Receivables
Aging and bad debt history show customer quality.
Working Capital
Distributors need cash for stock and receivables. Lenders size working capital into the deal.
Customer Spread
A wide base of repeat business customers reads well.
Cash Flow That Covers The Loan
SBA sets the minimum at 1.25 times the debt payments for an acquisition, using the last fiscal year or the average of the last two. Projections can be reviewed but cannot be relied on to meet it.
Lenders also look at you: management experience that fits the business, personal credit, and current taxes and debts. Owners of 20% or more of the buyer personally guarantee the loan.
What To Check Before You Buy A Distribution Company
Due diligence protects your Down Payment and speeds up underwriting, because lenders ask for most of this anyway. Start these items as soon as your letter of intent is signed.
How Distribution Company Acquisitions Are Structured
Every SBA acquisition follows SOP 50 10 8.1, the SBA rulebook in effect for applications from October 1, 2026. Within those rules, the structure is built around the business’s cash flow, the seller’s goals and how much cash you want to keep.
10% Down, Part From The Seller
Most distribution company deals combine buyer cash with a seller note. A seller note on full standby counts for up to half of the 10% Down Payment; a note that is paid during the loan must fit the cash flow alongside the SBA payment.
10-Year Term, 25 For Real Estate
The business portion repays over up to 10 years with no balloon. Real estate bought with the business can run up to 25 years, in a blended loan or a separate one.
Line Of Credit At Closing
Distributors and rental businesses usually close with a line of credit next to the term loan to fund inventory and receivables.
Working Capital Line
Many buyers add an SBA Express or other line of credit at closing, so the business has cash for payroll, inventory and receivables from the first day.
Quality Of Earnings At $3M
When the Business Purchase Price, not counting real estate, is $3 million or more, the lender needs an independent Quality of Earnings report in addition to the business valuation.
Above $5M: Pari Passu
The SBA 7(a) loan is capped at $5 million. Larger acquisitions pair it with a conventional loan that shares the collateral equally, with the same 10% Down Payment on the total project.
The seller cannot stay on as an owner or employee, but can consult for up to 24 months to hand over customers, staff and know-how.
Recent Deals We Closed In This Industry
Real loans GoSBA placed. Borrower and lender names are kept private. GoSBA funded $320M across 126 loans in 2025, working with 50+ lenders.
Evaporative Cooler Supply Distributor
5% down + 5% seller note on full standby; includes real estate
Specialty Gutter Products Distributor
10% down + seller note on standby + SBA Express line of credit
Diabetes-Focused Healthcare Products Business
Buyer cash + subordinated seller notes
Top SBA Lenders For Distribution Company Acquisitions
Among the 15 largest SBA lenders to wholesale distributors by dollars in FY2026, these made the most acquisition loans. The best lender for you depends on deal size, your experience and the structure, which is why we take each deal to the lenders that fit.
| Lender | Headquarters | Acquisition Loans | All Loans In Industry |
|---|---|---|---|
| The Huntington National Bank | Columbus, OH | 11 | 12 |
| Live Oak Banking Company | Wilmington, NC | 4 | 8 |
| Pinnacle Bank | Nashville, TN | 4 | 4 |
| Bankwell Bank | New Canaan, CT | 2 | 3 |
| CommunityAmerica Federal Credit Union | Lenexa, KS | 2 | 2 |
| U.S. Bank | Cincinnati, OH | 1 | 15 |
| Southwestern National Bank | Houston, TX | 1 | 2 |
| FinWise Bank | Murray, UT | 1 | 3 |
Based on SBA 7(a) data through September 30, 2026. See the full ranking of SBA lenders for wholesale distributors
How It Works With GoSBA
One team from pre-qualification to closing. You never pay us; the lender does, after closing.
Get Pre-Qualified
Request a pre-qualification letter so sellers and brokers take your offer seriously. It takes a few minutes.
Send Us The Deal
Once you have a business in mind, share the listing or letter of intent and the seller’s financials.
Lenders Compete
We package the deal and take it to the SBA lenders that fit, from our network of 50+. You choose the best offer.
Close With Us
We handle lender questions, third party reports and the closing checklist until the loan funds.
Documents You Will Need
Lenders ask for the same core package on every acquisition, plus a few items specific to wholesale distributors. We help you gather anything missing and send it to lenders in one clean package.
- Signed letter of intent or purchase agreement
- The business’s last 3 years of tax returns
- Year-to-date profit and loss statement and balance sheet
- Supplier and territory agreements
- Inventory or fleet list with values
- Receivables aging
- Your last 3 years of personal tax returns
- Personal financial statement and resume
- Proof of your Down Payment funds
What Buyers Say
Without Ishan’s guidance, persistence, and expertise, I do not believe I would have closed my deal.
Ishan and the folks at GoSBA were instrumental in making our small business acquisition dreams a reality!
Frequently Asked Questions
How much do I need down to buy a distribution company?
At least 10% of the total project cost, and SBA does not allow the lender to waive it on a business purchase. Up to half can be a seller note on full standby. At the industry’s average acquisition loan of $1.5M, that is a Down Payment of about $164K, with as little as $82K from you.
How big an SBA loan can I get to buy a distribution company?
An SBA 7(a) loan goes up to $5 million, and larger deals add a conventional loan in a pari passu structure. In FY2026 lenders made 35 acquisition loans to wholesale distributors, averaging $1.5M. Your amount is set by the business’s cash flow and an independent valuation.
Can working capital be included in the acquisition loan?
Yes. Working capital can be part of the project. The 10% Down Payment is measured on the total project, including working capital.
Can the seller stay on after I buy a distribution company?
Not as an owner or employee. The seller can work as a consultant for up to 24 months in total to transition customers, staff and know-how, and often carries part of the price as a seller note.
Which lenders finance distribution company acquisitions?
In FY2026, The Huntington National Bank, Live Oak Banking Company and Pinnacle Bank were among the most active acquisition lenders in this industry. The right lender depends on the size of the deal, your experience and the structure. We take your deal to the lenders that fit from our network of 50+.
What does GoSBA cost?
Nothing. We are paid by the lender after your loan closes, not by you.
Buy A Business In A Related Industry
Keep reading: SBA Business Acquisition Loans · SBA Pari Passu Loans · Buying A Business Guide · Best SBA Lenders For Wholesale Distributors · Closed Deals · Pre-Qualification Letter · All Industries
Get Started On Your SBA Loan
Tell us about your deal. An SBA loan broker reviews it and gets back to you within one business day.
Thanks, we got it.
A senior advisor will reach out within one business day with next steps.