SBA loans for Shopify and DTC brand acquisitions
We place acquisition debt for buyers of Shopify and direct-to-consumer brands at $750K to $250M in enterprise value. Underwriting turns on whether the brand owns its customers or rents an audience: blended CAC trend, cohort repeat rate, and contribution margin by SKU.
A Shopify or direct-to-consumer brand is one of the few ecommerce categories where the buyer actually acquires the customer relationship. The storefront is yours, the domain is yours, the email and SMS list is yours, and the order history sits in an admin you control. Nothing can suspend the account overnight, and no marketplace sits between the brand and the person who bought from it. That is a real credit strength, and it is the reason a well-run DTC brand underwrites better than its revenue volatility would suggest.
The risk moves somewhere else. Owning the storefront also means owning customer acquisition cost. A marketplace seller inherits demand; a DTC brand manufactures it, month after month, out of paid social, search, creator spend, and its own list. So the underwriting question is not "is this a good brand." It is narrower and more useful: does this business have customers, or is it renting an audience? A brand with a 34 percent repeat rate at 365 days and a third of revenue arriving through email and SMS is a different credit than a brand at the same revenue with a 9 percent repeat rate and 82 percent of orders coming from cold Meta traffic. The second one is not a brand. It is an arbitrage, and arbitrage does not service ten-year debt.
Most DTC acquisitions we place route to SBA 7(a). It carries the highest leverage and the lowest cost of capital, funds goodwill (which is nearly all of the purchase price in this category), amortizes over ten years with no balloon, and lets us fund the Q4 inventory build inside the same facility as the acquisition. The statutory 7(a) ceiling is $5M in total SBA exposure, which covers the large majority of brands in the $750K to $5M enterprise value range. Above that, or where the structure does not fit SBA rules (a partial buyout, a foreign-domiciled supplier entity, an earnout the SBA will not recognize), FLEX takes deals up to $10M. Institutional Capital Access handles $10M to $250M, which in this category usually means a platform roll-up rather than a single brand.
We are an advisory firm, not a lender. We structure the deal and place it with the lender partners who already understand contribution margin and cohort curves, so you are not spending three weeks teaching a credit officer what MER means.
1. Blended CAC trend over 24 months, not a single-month snapshot. We pull total paid media spend (every channel, plus agency and creator fees) divided by new customers acquired, month by month, for the trailing 24 months. One month tells you nothing; the slope tells you everything. Flat or improving blended CAC against a rising average order value is the strongest single signal in a DTC file. CAC up 30 percent year over year while AOV holds flat means the brand is buying the same revenue at a worse price each quarter, and that trajectory gets priced into the projection rather than waved off as an algorithm problem.
2. Cohort repeat rate at 90, 180, and 365 days. Lifetime value in a broker's CIM is usually a forecast dressed as a fact. Cohorts are not. We take monthly acquisition cohorts, measure the share placing a second order at 90, 180, and 365 days, then compare recent cohorts against ones from 18 months ago. Category sets the bar: consumables run 30 to 45 percent at a year, apparel 20 to 32 percent, durable home goods often under 18 percent. Degrading cohorts mean the brand scaled into a worse customer, and revenue growth is masking a deteriorating asset.
3. Contribution margin by SKU, after every variable cost. Gross margin is not the number. Contribution margin is revenue less COGS, inbound freight and duty, pick and pack, outbound shipping, payment processing, returns, and the variable marketing attributable to the sale. Run it per SKU. Nearly every DTC brand has a hero SKU carrying the P&L and a tail that loses money on shipping alone. Lenders want 30 percent or better held steady across periods, and they want the hero SKU concentration backstopped by more than one supplier.
4. Working capital pegged to the seasonal inventory cycle. DTC cash flow is not level. A brand doing 38 percent of revenue in Q4 lays out cash for that inventory in August, roughly 90 to 120 days before the receipts arrive. Close in July with no working capital in the facility and the buyer misses the build, so year one underperforms the projection the loan was approved on. We size the tranche off the trailing 24-month inventory cycle and fund it inside the acquisition loan.
5. Coverage tested against a stressed CAC case. Every file goes to committee with a base case and a downside where CAC rises 20 percent and paid revenue contracts to match. Clearing the 1.25x DSCR floor only in the base case means the deal is over-levered for this category, and the fix is to restructure (more seller paper on standby, a lower price) rather than submit it and hope.
- Blended CAC trend, 24 months
- Cohort repeat rate by month
- Contribution margin by SKU
- Inventory aging and turns
- Supplier and 3PL concentration
- Ad and analytics account access
Ad-account-level access, not a screenshot deck: We ask for read access to Meta Ads Manager, Google Ads, any creator platform in the mix, GA4, and the Shopify admin. A broker's summary tab is not diligence. Direct access lets us rebuild blended CAC ourselves, see disapproved accounts and fatigued creative, and confirm the ad accounts and pixels belong to the entity being sold rather than to an agency or the founder personally.
Cohort exports out of Shopify and Klaviyo, not a CIM chart: We pull order-level data and rebuild the cohort tables. That surfaces what summary charts hide: discount-driven first orders that never repeat, a subscription program churning by the third billing cycle, and the true share of revenue from owned channels. Email and SMS at 25 to 35 percent of revenue is a better credit than the same brand at 8 percent.
Inventory aged, counted, and valued at what a liquidator would pay: Inventory is collateral, but not at book. Lenders advance against orderly liquidation value and discount further for goods aged past 180 days, seasonal leftovers, or private-label items with no secondary market. We want the aging report, turns by SKU, and the 3PL on-hand count reconciled to the balance sheet. It is usually the largest working capital adjustment, so settle it in the purchase agreement.
Supplier and tooling concentration mapped to contracts: We list every manufacturer, contract packer, and 3PL with the share of COGS each carries, then confirm whether each is contractual or a handshake and whether it survives a change of ownership. Same exercise on the stack: Shopify plan and app dependencies, Klaviyo, the subscription platform, and any custom middleware built by a developer not coming with the deal.
Seasonality reconciled against the debt service calendar: We map monthly revenue, gross profit, and inventory outlay across 24 months, then lay the projected loan payment over the top to find the months the business is cash-negative by design. Post-close liquidity is part of the credit decision, so a buyer who puts every dollar into the down payment is the weaker file.
Owner dependency and brand-face risk: If the founder appears in the creative, owns the personal following that drives launches, or holds the top creator relationships, that is a transferability problem with a dollar cost. We quantify the replacement (a marketing hire, a creator agency, a defined transition period) and put it in the projection before committee.
The following is an illustrative structure, not a real transaction. It is here to show how the pieces fit together on a typical DTC file, and every number in it is a worked example.
Assume a nine-year-old supplements brand on Shopify. Trailing twelve months of $4.1M in revenue and $1.05M in seller's discretionary earnings. Purchase price $3.6M, which is roughly 3.4x SDE and inside the range this category trades at in 2026.
What made it financeable was the cohort profile, not the revenue. Blended CAC moved from $41 to $44 across the trailing 24 months while average order value rose from $78 to $86, so acquisition efficiency was flat to slightly improving rather than degrading. The 365-day repeat rate was 34 percent, consistent with a consumable, and the 18-month-old cohorts retained at nearly the same rate as recent ones. Email and SMS drove 31 percent of revenue, so a third of the top line was not being repurchased from Meta every month. Contribution margin held at 34 percent, with the top SKU at 41 percent of revenue, concentrated but supported by a two-source manufacturing arrangement.
The structure: total project cost of $3.85M, being the $3.6M purchase price plus $250K of working capital sized to the August inventory build ahead of a Q4 that carried 38 percent of annual revenue. SBA requires a 10 percent equity injection on a full change of ownership, which is $385K here. The buyer put in $192,500 in cash, and a seller note of $192,500 on full standby covered the other half of the requirement. The SBA 7(a) loan came to $3,465,000, well inside the $5M statutory ceiling, amortized over ten years with no balloon.
Coverage: annual debt service of roughly $544K against SDE of $1.05M, less $120K of new owner compensation and $60K for a marketing hire to replace the founder's role in creative direction. That leaves about $870K of cash flow available, or a DSCR near 1.60x, comfortably above the 1.25x floor. Under the stressed case (CAC up 20 percent and paid revenue contracting to match), coverage still cleared 1.25x, which is what gets a DTC file through committee without a fight.
Can you use an SBA loan to buy a Shopify store?
Yes. An SBA 7(a) loan can fund the acquisition of a profitable Shopify or DTC brand, including the goodwill that makes up most of the purchase price, with working capital built into the same facility. The business needs a verifiable operating history, tax returns that reconcile to the Shopify and payment processor data, and cash flow that clears a 1.25x debt service coverage ratio. Total SBA exposure is capped at $5M by statute, so brands priced above that route to FLEX or institutional debt.
What multiple do Shopify and DTC brands sell for in 2026?
Owner-operated Shopify and DTC brands generally trade at 2.5x to 4.5x SDE in 2026, with most transactions in the $750K to $6M range landing in the middle of that band. Brands push toward the top or above it when contribution margin holds above 30 percent, the 365-day repeat rate is strong for the category, and owned channels like email and SMS carry 25 percent or more of revenue. Brands dependent on cold paid social for the large majority of orders price at the bottom of the range, and heavily discounted acquisition can pull them below it.
How much do I need to put down to buy a DTC brand with an SBA loan?
SBA rules require at least a 10 percent equity injection on a complete change of ownership, calculated on total project cost including working capital and closing costs, not just the purchase price. Up to half of that requirement can be satisfied by a seller note placed on full standby, which means the buyer's own cash can be as low as 5 percent of the project. Lenders will also want to see post-close liquidity beyond the injection, particularly on a seasonal brand that has to fund a Q4 inventory build in its first year.
Do lenders count inventory as collateral on a DTC acquisition?
Inventory counts, but not at book value. Lenders advance against orderly liquidation value, which is a steep discount to cost, and they discount further for goods aged past 180 days, discontinued items, seasonal leftovers, and private-label products with no secondary market. On most DTC acquisitions the loan is supported primarily by cash flow and the personal guarantee, with inventory and equipment as secondary collateral, so a large inventory balance strengthens the file without changing the leverage math much.
What CAC and retention numbers do lenders want to see?
There is no universal threshold, because the answer is category dependent, but the pattern matters more than the level. Lenders want blended CAC flat or improving over the trailing 24 months against a stable or rising average order value, and cohort repeat rates that hold steady across recent and older cohorts rather than degrading as the brand scaled. Repeat rate at 365 days runs roughly 30 to 45 percent for consumables, 20 to 32 percent for apparel, and lower for durable home goods, so we underwrite against the right comparison set.
What happens if the brand is priced above the $5M SBA limit?
The SBA 7(a) program is capped at $5M in total SBA exposure, so a larger purchase price needs a different structure. Our FLEX program covers acquisitions up to $10M and can accommodate structures SBA rules will not fit, such as a partial buyout or an earnout the agency does not recognize. Above $10M, Capital Access places institutional debt from $10M to $250M, which in this category usually means a multi-brand platform rather than a single storefront.
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