Seven Steps for Business Acquisition Loan Success

1
Seven Steps for Business Acquisition Loan Success

• Business Acquisition Loans

2
Overview

• Looking to acquire a business? A business
  acquisition loan could be your key to success.
  Learn the seven essential steps to secure
  financing, including preparing your application,
  researching loan options, and understanding loan
  terms. Be ready to make the winning offer and
  choose the best financing to grow your business.
• Click Here to Discover the steps to business
  acquisition loan success today with Biz2Credit!

3
What to Know About Small Business Acquisition
Financing

• Borrowers can use small business acquisition
  loans for various needs, such as covering startup
  costs, buying commercial real estate, or buying a
  franchise.
• Be sure to shop around with various SBA lenders
  and credit unions for your business loan, to get
  the most competitive rates and check your
  eligibility.
• Beth Goldberg, Director of the New York District
  SBA Office, said that besides the seven points
  below, entrepreneurs should put themselves in a
  lenders shoes whenever they consider applying
  for a small business loan.

4
Seven Steps for a Business Acquisition Loan

• To find success in securing loans to purchase a
  business, borrowers should have the following
• 1. Letter of Intent
• When seeking a loan to fund a business
  acquisition, having a signed letter of intent to
  purchase is a requirement for just about any
  small business lender. The letter should outline
  the terms of the deal and include a contingency
  clause explaining that the purchase is contingent
  on the buyers ability to secure the funding
  required to buy the business.

5

• 2. A Strong Personal Credit History
• Typically, to secure a small business loan,
  lenders will look for an individual owner (or
  partnership members if the business has multiple
  owners) to have credit scores of 650 or above.
  Naturally, the higher the credit score, the
  better the potential borrower's chance of
  securing financing. Those with personal credit
  scores in the 750-850 range stand a good chance
  of getting a loan and are usually able to do so
  at a more attractive interest rate than someone
  with a lower credit score. Its a simple law of
  economics for the lender the higher the risk,
  the higher the reward (in the form of increased
  interest rates charged).
• 3. Personal Financial Statement
• The personal financial statement provides
  financial information about the borrower(s)
  intending to acquire the business. In
  partnerships, everyone with 20 equity or more
  will be a loan guarantor, meaning all
  shareholders must provide this documentation.

6

• 4. Two to Three years of Tax Returns
• Lenders want to know that youve been staying on
  top of all your obligations. When you apply for a
  loan, lenders typically ask you to produce your
  recent tax history. To be on the safe side, be
  ready to have three years worth of personal tax
  returns to show your lender. Borrowers with
  existing businesses should be prepared to provide
  returns filed by those companies.
• 5. Financial Statements from the Acquired
  Business
• Most lenders want to see the companys annual
  revenues and three years worth of financial
  documents profit loss statements, balance
  sheets, and cash flow statements from the
  company borrowers seek to acquire. Lenders will
  use these documents and disclosures to assess the
  viability of the business borrowers seek to
  acquire. 

7

• Remember, their main concern is whether or not
  borrowers will repay the loan. If the target
  company has lost money for the past three years,
  securing the financing to purchase it will be
  much more challenging. Borrowers should be ready
  to explain in detail how they will turn the
  business around.
• 6. Investing Your Own Resources In The Business
• Lenders want to make sure that borrowers are
  serious about the business before they approve
  a loan to buy a business. One way to prove it is
  by investing your own money into the venture.
  After all, if youre running the business and
  arent willing to put up your own money, why
  would a lender want to? Some banks will look for
  a minimum owner contribution of 10 percent as a
  down payment. Others prefer 20 percent. A higher
  percentage is an indication that you are willing
  to put skin in the game and conveys that you
  are committed to making the business succeed.

8
7. Business Plan

• A well-written business plan can make the
  difference between lenders approving or denying
  the loan. It should include
• Executive Summary (keep to one or two pages)
• Business Description
• Description of the Local Market and Competitive
  Landscape
• Product or Service Details
• Sales and Marketing
• Read more https//www.biz2credit.com/revenue-base
  d-financing/steps-business-acquisition-loan-succes
  s

9
Eligibility Criteria
10
Why Choose Biz2Credit?

• Trusted partner for franchise funding
• Biz2Credit was founded in 2007 and has provided
  more than 10 billion in loans.
• Dedicated support team
• Tailored financing solutions

11

• Thank You