Business Acquisition Loans
Buy an Existing Business
Are you ready to become your own boss? Rather than going the risky startup route, have you considered buying a currently operating business? There are many existing business for sale out there that are stable and healthy and therefore can provide an immediate income to you without going through the lean years of a typical startup. We can guide you on your path to independence.
About Loan Programs for Business Acquisition Purposes
This page refers to buying a non-franchise businesses. For starting or acquiring a franchise business, please see the Franchise Financing page. For adding owner-occupied commercial real estate to an already-owned business, please see the Buy a Commercial Property page.
Funding can be accessed to buy an existing business or perhaps to buy out a partner on your current business. The most popular program is the US Small Business Administration (SBA) 7(a) loan program. This program has some very attractive features that you should know about:
loan-to-value (LTV) of up to 90% means that you may only need to produce 10% of the purchase price from your own cash/funds (which may include a seller note of 5%)
highly competitive FIXED interest rates on terms up to 10 years (no real estate involved) or 25 years (with real estate)
very light pre-payment penalties in the first three years (and none after that)
it is often possible to lend substantial amounts against company goodwill (which is essentially unsecured lending)
Large loan sizes: up to $3 million without real estate and up to $5 million with real estate
Furthermore, all of the above can be done at a speed well ahead of traditional bank lending programs. With SBA Preferred Lending Partners (PLP), it is typical to see a proposed loan sheet within 48 hours and, upon successful underwriting, a deal closing within 45-60 days. In contrast, a typical big bank is not highly focused on SBA loans as it is merely one of their many offerings and thus SBA lending is a slow process. Work with SBA experts at Kirksley and you will reach your business goals sooner.
Additional Funding on Top of the Entity Acquisition Amount
On top of the cost of acquiring the business, it is also quite possible to add funds in order to provide a healthy amount of working capital/liquidity after purchase and/or funds for the procurement of important business equipment for the profitable continuation of the ongoing operation.
Do you have a business acquisition target in mind but lack the cash to come up with 10% of the purchase price? Kirksley can help you access all or part of your 401(k) account balance as a source of the cash injection down payment. Contact us for more information on how this interesting form of financing can be done.