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Business Loan
Most business buyers will use
a business loan to buy a business. The amount of the
down payment can have a big impact on how salable a
business is. Whether a buyer gets a business loan from
the seller or a lender, we get a personal financial
statement and credit report from the buyer when they
make an offer. You need to decide, before you accept the
offer, if you want to give the buyer a business loan or
if they are likely to be approved by a lender for a
business loan.
Most sellers would rather have
the buyer get a business loan from a lender. The buyer
may not be able to get it if the financials of the
business are not good enough or the business records do
not show good results for the last three years. Seller
financing may also be needed if the lease that the buyer
will get on the business premises is not as long as the
term of the loan. A lender will not make a loan with a
longer term than the length of the buyer's lease. Seller
financing may be required to make the sale.
A
loan from the seller is the quickest and easiest way to
finance the sale. The buyer normally puts down 40% to
50% and the rest is financed by the seller over 3 to 5
years. The assets of the business are the typical
collateral for the loan. As noted above, we get credit
information from the buyer for you if this is how the
sale will be financed.
We can also help the
buyer get SBA
financing. This is desirable for both parties. You
have to finance little or none of the sale. SBA
financing allows the buyer to put down a lower down
payment, 15% to 20% of the purchase price, and finance
the purchase over a longer time, 10 years. The loan can
be 20 years if it includes real estate. We are getting
businesses pre-qualified for SBA
financing. to help sell them. We advertise the low
down payment that is required to buy the business. Our
Confidential Business Profile helps a buyer get
financing by providing a report about the business that
they can use when applying for a business loan.
This is another service that we provide that
increases the chance of a successful sale of your
business.
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