The most substantial source of financing for an EtA (Entrepreneurship through Acquisition) business will be bank financing. A quick survey of two dozen searchers finds they have raised between 35% to 75% of their transaction price through bank debt with the average being 51%, with an additional 10-40% coming from the seller. Traditional banks have become more willing to lend against historical earnings even for businesses with few assets for collateral. In the USA, the SBA (Small Business Administration) loan guarantee program has made it much easier to raise debt, and to be competitive banks have become more flexible. There is a wide variety of searcher experiences internationally that should be understood and vary widely country to country – Brazil, almost non-existent to UK which is very similar to the USA.

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Search On!!!

Jim Sharpe