Business Acquisition Loans

Please note that our minimum loan requirement is $250,000.

SBA loan funds can be used to purchase the assets of an existing business. Note, that this covers only the "hard" assets of the business you plan to buy, not goodwill for example.

The SBA guidelines concerning such transactions are as follows:

• Owner cash injection must be between 30-50% of the business purchase price.
• SBA funds cannot finance the purchase of an intangible asset, such as goodwill -- this is normally covered by owner cash injection.
• The business to be acquired must be profitable and have sufficient historical cash flow to support the new debt.  That means that were we to take last year's net profit and add back in depreciation and interest and deduct all going forward loan payments including the new SBA loan, there must be a positive cash flow.
• The buyer must have experience in the line of business being acquired.  Franchises are excluded from this requirement since the new owner will be trained by the franchiser.
• If the business is a retail operation the SBA requires that the term of the lease for the business to be acquired is equal to or longer than the term of the loan.

SBA terms for a business purchase loan are up to 10 years.

Key Benefits

• Fully Amortized Term
• No Prepayment Penalties
• No Balloon Payments