What Is a Roll-Up Strategy — And Why Are Smart Entrepreneurs Using SBA Loans to Execute One?
In the world of business acquisitions, few strategies are as powerful — or as misunderstood — as the roll-up. While private equity firms have used roll-ups for decades to build massive empires, most everyday entrepreneurs don’t realize they can execute the exact same playbook using SBA loans.
A roll-up strategy involves acquiring multiple businesses in the same industry, combining them under one ownership umbrella, and creating a company that’s worth far more than the sum of its parts. Think of it as assembling puzzle pieces — each individual business is valuable on its own, but together they create something exponentially more powerful.
The beauty of using SBA loans for a roll-up? You don’t need millions in personal capital to get started. With as little as 10% down on your first acquisition and potentially 0% down on subsequent same-industry acquisitions, the SBA program is arguably the most accessible path to building a multi-location business empire in America.
At GoSBA Loans, we’ve helped entrepreneurs across the country execute roll-up strategies using our network of 50+ SBA lenders. With over $320 million funded in 2025 alone, we’ve seen firsthand how this strategy transforms first-time buyers into industry leaders. And our service is completely free — we even provide a free business plan and financial projections (a $2,500–$5,000 value) to help you get approved.
How the Roll-Up Strategy Works: The Step-by-Step Playbook
A successful roll-up doesn’t happen by accident. It requires planning, patience, and the right financing partner. Here’s how the strategy typically unfolds:
Step 1: Acquire Your Platform Business
Your first acquisition is your “platform” — the foundation upon which you’ll build everything else. This should be a well-run business with:
- Strong cash flow that comfortably covers SBA loan payments
- Experienced management or systems that can operate without you in the weeds daily
- Growth potential through geographic expansion or service additions
- A good reputation in its market that you can leverage for future acquisitions
For this first deal, you’ll typically need 10% down through a standard SBA 7(a) loan. The SBA allows loans up to $5 million, meaning your platform acquisition can be a substantial business right out of the gate.
Step 2: Stabilize and Optimize
Before jumping into your second acquisition, spend 6–12 months learning the industry, optimizing operations, and building the infrastructure to support multiple locations. This means:
- Standardizing operating procedures
- Implementing scalable technology systems
- Building a management team that can handle growth
- Establishing vendor relationships that will benefit from increased volume
Step 3: Acquire Competitors (The Roll-Up Begins)
Here’s where the magic happens. Once you own an operating business, you become eligible for SBA expansion loans — and the terms are incredibly favorable. When you acquire a business in the same NAICS code (same industry), many lenders will offer:
- 0% down payment — the existing business’s equity serves as collateral
- Streamlined underwriting — lenders love proven operators expanding in their industry
- Faster closing timelines — you’ve already been through the process
Learn more about how expansion loans work in our detailed guide: SBA Expansion Loans Explained.
Step 4: Integrate and Create Synergies
Each acquisition should make your overall company stronger. Integration creates value through:
- Shared overhead — one accounting team, one marketing department, one HR function
- Purchasing power — negotiate better rates with suppliers as your volume increases
- Cross-selling — offer services from one location to customers of another
- Talent pooling — move your best people where they’re needed most
Step 5: Repeat and Scale
With each acquisition, your company becomes more valuable, your operations more efficient, and your financing options more attractive. The roll-up flywheel is spinning.
The $5 Million SBA Cap: How to Work Around It with Pari Passu Lending
One of the biggest misconceptions about SBA roll-ups is that you’re limited to $5 million in total SBA lending. While it’s true that a single SBA 7(a) loan maxes out at $5 million, that doesn’t mean your roll-up has to stop there.
Enter pari passu lending — a structure where two or more SBA lenders share a single loan on equal footing. This allows you to effectively exceed the $5 million cap by having multiple lenders participate in your deal.
How Pari Passu Works for Roll-Ups
- Multiple lenders, one deal: Two SBA lenders each provide up to $5 million, giving you access to up to $10 million in SBA-guaranteed financing
- Equal priority: Both lenders share collateral rights equally — neither is “senior” to the other
- Coordinated closing: Both loans close simultaneously as part of the same transaction
- Same favorable terms: You still get SBA interest rates and repayment terms on the full amount
Pari passu structures are complex and require a broker who knows which lenders are willing to participate. This is exactly where GoSBA’s 50+ lender network becomes invaluable — we know which lenders do pari passu deals and how to structure them for approval.
For a deep dive into this strategy, read our complete guide: Pari Passu SBA Loans: How to Finance Deals Above $5 Million.
Industries Perfect for SBA Roll-Up Strategies
Not every industry lends itself to a roll-up. The best roll-up targets share common characteristics: fragmented markets with many small operators, recurring revenue, and local competitive advantages. Here are the industries where we see the most successful SBA roll-ups:
HVAC and Mechanical Services
The HVAC industry is a roll-up dream. Thousands of small, independently owned companies serve local markets with recurring maintenance contracts. When you combine multiple HVAC companies:
- Service territory expands dramatically
- You can offer 24/7 coverage more efficiently
- Equipment purchasing power increases significantly
- Commercial contracts become accessible (they require scale)
Plumbing Companies
Similar to HVAC, plumbing is hyper-local and fragmented. Many owners are aging out of the business with no succession plan — making them eager sellers. A two- or three-location plumbing company commands a much higher valuation multiple than a single-truck operation.
Landscaping and Lawn Care
With low barriers to entry and thousands of small operators, landscaping is ripe for consolidation. Roll-up benefits include shared equipment, route optimization across territories, and the ability to bid on larger commercial contracts.
Dental Practices
Dental is one of the hottest roll-up sectors in the country. DSOs (Dental Service Organizations) have proven the model at scale, but there’s still enormous opportunity for entrepreneurs to build regional dental groups using SBA financing. Benefits include shared administrative staff, centralized billing, and group purchasing on supplies.
Other Strong Roll-Up Industries
- Pest control — recurring revenue, route density matters
- Auto repair shops — brand consolidation, parts purchasing power
- Veterinary practices — similar dynamics to dental
- Insurance agencies — book of business acquisitions compound quickly
- Home cleaning services — scalable systems, territory expansion
The Financial Math Behind a Roll-Up: Why 1+1 = 3
The real power of a roll-up isn’t just in owning more businesses — it’s in the multiple expansion that happens when you combine them. Here’s a simplified example:
Individual Business Valuations
- Business A: $500K annual cash flow × 3x multiple = $1.5M value
- Business B: $400K annual cash flow × 3x multiple = $1.2M value
- Business C: $350K annual cash flow × 3x multiple = $1.05M value
- Total if sold separately: $3.75M
Combined Company Valuation
- Combined cash flow: $1.25M (plus $150K in synergies from shared overhead)
- Combined adjusted cash flow: $1.4M
- Applied multiple: 4.5x–5x (larger companies command higher multiples)
- Combined value: $6.3M–$7M
That’s nearly double the value — and you acquired all three businesses with SBA financing requiring minimal down payment. This is the wealth-creation engine that makes roll-ups so compelling.
Common Mistakes in SBA Roll-Up Strategies (And How to Avoid Them)
We’ve seen entrepreneurs succeed spectacularly with roll-ups — and we’ve seen some stumble. Here are the most common pitfalls:
- Moving too fast: Don’t acquire your second business before the first is stable. Give yourself at least 6 months.
- Ignoring culture: Each business has its own culture. Heavy-handed integration destroys value. Keep what works.
- Overpaying: Just because a business is in your target industry doesn’t mean it’s a good deal. Maintain valuation discipline.
- Underestimating integration costs: Budget for technology migrations, rebranding, and management time during transitions.
- Wrong financing structure: Using the wrong SBA product or lender can cost you hundreds of thousands over the life of your loans. Work with a broker who specializes in multi-acquisition strategies.
How GoSBA Loans Powers Your Roll-Up Strategy
Executing a roll-up requires a financing partner who understands the big picture — not just individual transactions. Here’s why entrepreneurs choose GoSBA Loans for their roll-up strategies:
- 50+ lender network: We match each acquisition to the ideal lender based on deal size, industry, and structure
- Pari passu expertise: We know which lenders participate in shared deals and how to structure them
- Expansion loan specialists: We’ve helped countless business owners secure 0%-down expansion loans for same-industry acquisitions
- $320M+ funded in 2025: Our track record speaks for itself — lenders trust our deals
- 100% free service: We’re paid by the lender, not by you. Our service costs you nothing.
- Free business plan & projections: Every client receives a professional business plan and financial projections — a $2,500–$5,000 value — at no cost
Whether you’re acquiring your first platform business or your fifth bolt-on, we structure each deal for maximum approval probability and optimal terms.
Ready to Start Your Roll-Up? Let’s Talk Strategy.
Building a business empire through SBA acquisitions isn’t just for private equity firms anymore. With the right strategy, the right industries, and the right financing partner, you can build a multi-million dollar company one acquisition at a time.
The first step is a conversation. Tell us about your vision — the industry you’re targeting, how many businesses you want to acquire, and your timeline. We’ll map out a financing strategy that makes it possible.
👉 Schedule Your Free Roll-Up Strategy Session with GoSBA Loans
No cost. No obligation. Just expert guidance from a team that’s helped fund over $320 million in SBA deals.
