getting a loan to buy an existing business

Buying an existing business with an SBA Loan

First Financial Franchise Purchase, Starting a Business 14 Comments

 What are your chances?

Buying a business can be an amazing decision or it could be a disaster. There are obvious and very lucid advantages and disadvantages of buying a business. There are investors who have made a fortune by buying and selling businesses. But those billionaires are few and far between. But we are not focusing on pros and cons of buying a business or what challenges one may have to overcome and how one can make money. We have to talk about buying a business with the help of an SBA loan. Is it possible and if it is then what are your chances of getting approved?

SBA Loan can be used for Buying a Business!

Let us rest all speculation. You can get an SBA loan if you are buying a business. There are four types of SBA loans available right now. 7a which is the most common SBA loan is the best option you have. CDC loan which is the second most preferred SBA loan is also a choice. Microloans and specialty loans are not ideal for buying a business but even then you can consider them if they are appropriate.

7a or the Loan Guarantee Program

This SBA loan can get you as much as five million. That is enough money for buying a business. More importantly, if you are planning to run the business, then you would get enough working capital as well. All you have to do is prove that buying the business will be financially rewarding and that you can run it well. There will be some assets in the business already which can be used as collateral and then there is personal expertise or professional accomplishments of the loan applicant to get the job done.

CDC or Fixed Asset Financing Program

This is another SBA loan that can help you to buy a business. You can get up to five million and an additional half mil if you are a manufacturer. Here again, the loan amount is sufficient for buying a business and even running it.

What are your chances?

Buying a business can increase or reduce your chances of getting an SBA loan. It all boils down to the state of the business you are buying, how it has fared in recent years, its potential, your experience or expertise and if it is relevant, the business plan and the assets that the business has.

First Financial can guide you through the process acquiring an existing business using an SBA Loan.  Further Reading Business Valuation when acquiring an existing business 

Comments 14

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      Author
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      Author

      Hello Annette,
      That fact that you have been in business for six years is good. We have a couple of different options that could work for you depending on what you are buying. Please call Karen Newell at 954-248-7701 or email her at karenn@ffcash.net She will be able to advise you further. Thank you.

    2. My wife and Daughter wants to purchase a Daycare that Family and operated for 22yrs. We need to get 350,000 loan to purchase the this business, my daughter has the education and good credit to get the loan. My name is Rashid S. Johnson, contact number is 816-305-3856

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        Author

        Hi Rashid,
        We didn’t see your comment on the website until now and apologize. If you are still looking for an SBA Loan I will have my associate Karen Newell give you have call. 350,000 is perfect, as it is the smallest acquisition amount we can do.

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      Author

      Hello Edouard,
      Sorry for the delayed response. I have password your information along to Karen Newell. She will reach out to you to discuss an SBA business acquisition loan.

  1. Hi,
    I am looking to buy an existing gas station. I have almost 14 years of experience running/managing a gas station, as a manager. My score is above 770 clean long credit history. Looking for a business 700k or below with good cash flow. Is it possible to get a approval with a 10% down? What are the chances with a SBA 7a loan?

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      Author

      Hi Sal,
      Yes, it’s possible. It will depend on the business appraisal. We would need to take a look at the P&L and Balance sheet of the business. I will have Karen Newell from our office get in touch with you.

  2. Hello I’m looking to purchase an existing business, a sports bar. I have an associates degree in education but looking to further my education in business management. The owner of the previous bar had a terrible tragedy happen with his business and is looking to sell to me for a great offer 100k. Will I be able to get a loan, without a credit score or will i need a co-signer. Also how quick can i recieve the loan if able?

    Thanks,

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      Author

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