Business Acquition Loans
A business acquisition loan allows you to:
- Purchase an existing business that has already been established
- Acquire or open a new franchise location
- Buy-out a partner in a business you presently own
Business acquisition loans include several options which we will explore here. The amount of funding and the cost of borrowing (interest rate/APR) will depend on the industry sector of the business you are trying to acquire, the balance sheet of the target company and your personal credit history.
Getting a loan to buy a business can get complicated and usually will take longer than other types of business loans. This guide is designed to provide an overview of the types of financing business owners use to acquire new businesses.
POPULAR LOAN TYPES FOR BUSINESS ACQUISITIONS
The first step is to identify the right type of loan program. Generally speaking, there are no loans that are designed specifically for business acquisitions. There are several options for loan types that are most commonly used for the purposes of acquiring a business, so let's start with those first.
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Traditional Bank (Term Loan)
This is the most basic form of loan, where the borrower receives a lump-sum disbursement from a lending institution and agrees to pay the amount back over the term of loan at an agreed-upon rate of interest. More Loan Types
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Equipment Financing
Equipment financing is a type of small business loan used primarily to purchase business equipment like computers, machinery, vehicles or most any business equipment. Business owners may use the new equipment as collateral for the loan, making equipment financing a smart way to preserve on-hand cash. Read More
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SBA Loans
The U.S. Small Business Administration, or SBA, is a federal agency that provides loan guarantee programs and other services to support and encourage the growth and development of small businesses across the United States. It was founded on July 30, 1953, and has delivered over 20 million loans, guarantees, counseling sessions, contracts, and other forms of assistance to small businesses across the country. SBA loans are offered to merchants through multiple financial institutions. Read More
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Roll over for Startup Businesses
ROBS allow you to use funds from a qualified retirement account; such as a 401k or IRA and rollover the investment into a company you own. It is not considered borrowing from your retirement account; it allows for entrepreneurs to use their business as the tax-deferred investment. Read More
Working with a Biz2Credit representative, you will be guided through these steps towards securing a business loan with bad credit. Your loan representative may also suggest alternatives and instruct you on best practices towards improving your creditworthiness.