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