Financing for Out-of-State Acquisitions

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by a searcher from Adler School of Professional Psychology
in Marysville, WA, USA

1yr ago

Financing for Out-of-State Acquisitions

For those of you who have purchased multiple businesses, specifically those with portfolio businesses across the US, how do you finance those acquisitions? I've been told that the SBA doesn't look favorably on buyers who don't plan to live close to their acquired business, which is hard-to-impossible to do if you're creating a nationwide portfolio.

Thoughts/experiences/stories welcome!

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reply by a lender 1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Great question Jessi. Yes, the majority of SBA lenders prefer the client to live near the business they are acquiring. However, there are always exceptions depending on the type of business. If the business in mainly an online business or the business has offices in multiple states, there is flexibility there. Also, if you have partners that may be close, not every owner needs to live onsite. However, the intent of the program is to encourage active ownership and management, so showing the lender a plan for how you will manage the business if remote, is going to be very important. Certain businesses that require substantial hands on support, like manufacturing companies, can be hard to get a lender comfortable with funding a purchaser if they will not be onsite. I am happy to talk through specific businesses and strategies. You can reach me here or directly at redacted

reply by a lender 1yr ago
from University of Utah in Sandy, UT, USA

Most if not all lenders will want one of the owners to be making the day to day decisions. In general you will need to live in the area of the company. Happy to discuss redacted orredacted