You’ve decided to purchase a business, and your excitement is mounting. You’ve talked with the current owners and know you can make a go of it, but where do you start? Getting a loan to buy an existing business is a little different than getting one to start a brand new company. A business acquisition loan is designed specifically for purchasing an existing business or starting a franchise. You’re going to want a great loan to make your business a success.
Start at the Beginning
The first step of getting any franchise or business acquisition loan is the business plan. Every loan, whether it’s for a new or existing business, requires a business plan. This plan is an outline of your business as well as an overall assessment of its financial future and how it has performed in the past. Lenders will compare the existing business plan with your new one, and that comparison will be a major factor in determining whether or not you get a loan.
The Usual Suspects
Business acquisition loans can be found in many of the same places as standard business loans.
- SBA Loans – The Small Business Administration (SBA) has some of the best loan programs in the industry. They have options that will help you buy a business, its inventory, and even its real estate, if necessary. Each of their loans is backed by the SBA.
- Banks and Other Lenders – Many banks and other lenders also have loans available for you. While they can be contact points for SBA loans, these organizations have their own loan programs as well. Because these loans can be a risk to the lender, and generally aren’t backed by a government entity, your credit will be under greater scrutiny, and you’ll likely have to provide collateral.
Under a Microscope
When you apply for a loan to buy a business, you’re going to be under even more scrutiny than if you were building one from scratch. The business will already have an existing customer base and brand, so the lender will look at the state of the existing business and determine if they think you’ll be able to maintain or grow it. They’ll also check your credit along with your business managerial or ownership experience.
Purchase your dream business today. Call us at 888-788-6456 or fill out our online form to start the funding process.