Business Acquisition Financing

Looking into obtaining funding to buy a business? Our financial consultants can help you explore your financing options, prepare your loan package for submission to a lender experienced in business acquisitions, and connect you with professionals to help you.

Process

Step 1. Will the deal make sense to the lender?  

We will discuss a number of factors including:

  • Your business experience credit history, financial strength, and personal goals
  • What are the trends that affect the industry?
  • What is your business plan to manage and grow the business?

Step 2. Is the purchase price reasonable based on the historical financial performance? Does the business offer the expectation of cash flows needed to make the deal “work”?

To avoid overpaying for a business, our SBDC consultants help prepare a formal Business Valuation based on the industry standard valuation methodology. This tool will help validate or question the asking price and compare financial performance against similar businesses in the same industry. If the price is not reasonable, we’ll try to determine what a fair price might be to you.

Step 3. Identify the professional advisors you’ll need to help you.

You will need an attorney and possibly a CPA experienced in small business purchases and sales. Our SBDC consultants will make sure you get your attorney involved at the right time.

Once you’re ready to make an offer, you’ll consult with your attorney and prepare a purchase offer.

 Step 4. Make your offer and negotiate a final Purchase Agreement which will include time to complete your Due Diligence and clear your offer contingencies. A refundable escrow deposit may be requested to show good faith. Your attorney will see that your interests are protected if you chose not to proceed.

Step 5. Due Diligence

Once you have a signed purchase contract, you’ll work with your advisors to complete your Due Diligence checklist on those issues not completed during the initial review and valuation process.

Step 6. Preparing a Loan Package

At the same time, we will help prepare a loan package for submission to a lender experienced in business acquisitions.

The SBDC will provide you with a checklist of the information needed and help you prepare the loan package in accordance with the lender’s preferences.

Our SBDC consultants will help you complete your formal loan request, which will include your business plan and the series of financial projections to be submitted with the request.

These include:

  • Source and Use of Funds
  • Opening Balance Sheet
  • Breakeven Analysis
  • 2 years Profit and Loss projections
  • 2 years of Cash Flow projections

Near completion of the loan package, our SBDC consultants will prepare a one page Loan Request Profile to send to our lenders to pre-screen the deal.

Once the loan package is complete, we will forward the files securely to the lender for formal review.

Step 7. When you’ve cleared the contingencies and financing is approved, your attorney will work with the Seller’s agent and escrow office to arrange the closing details.

Step 8. Close on the purchase of your new business

Once you’ve closed and are now a business owner, our SBDC Consultants will continue to help you explore marketing, sales and operational strategies that may enhance the sales and profits of your new business.

Process

Due Diligence (DD) - We Can Help!

DD is the process of verifying and validating seller representations and other key information that could have a negative impact on the business and risk your investment. Our SBDC consultants can help you identify significant risks and help you review important seller documentation including financial statements as well as provide significant benchmarking data for your industry.

Due Diligence (DD) - We Can Help!

FAQs

Q: Where do I start?

A: Our consultants will provide a Due Diligence checklist and help you manage the items to be completed.

Q: How do I know if the asking price of the business is reasonable?

A: We will prepare a formal Business Valuation in accordance with industry standards to test the seller’s pricing methodology. The Business Valuation may provide information you can use to negotiate better pricing.

Q: Where can I find market research and financial data for the industry?

A: The SBDC Intel team helps gather detailed business intelligence for your specific industry at no cost. The report provides clients with micro-level industry analysis, macro-level industry analysis, marketing insights, and suitability analysis.

Q: How do I find the best loan rates and terms?

A: Our SBDC consultants will help you find the best available rate and terms for your loan. Many of the nation’s top lenders welcome our loan submissions because our consultants are familiar with what they look for.

Q: How do we begin?

A: Complete this form. We will contact you to arrange a conversation to discuss your venture.

FAQs

Get in Touch With a Consultant

Mike Pagani
Business Consultant
[email protected]
linkedin.com/in/mikepagani

Areas of Expertise: Buyer Due Diligence Support, Financing for Small Business Acquisitions and Business Startups

 

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Exploring OpportunitiesNeed help vetting the dealUnder ContractOther

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Get in Touch With a Consultant