Hot Topic: How much should you pay for a business? This topic is always a difficult one for me because the answer is always it depends. The seller has a number stuck in their head because a broker overpromises and the buyer cannot get financing for an overpriced business.

As SBA lenders, our role is to assess the financial health and creditworthiness of a business.

In the small to medium-sized business space, there are very good businesses however, most businesses in this space have poor bookkeeping. Your role as the buyer should be to assess the weaknesses and see if your skillset would be able to enhance the business in its current state.

One of the benefits of using an SBA loan to buy a business is that the bank can help you assess the risk of default. The bank serves as another layer of eyes on the deal. The bank tends to ask questions that the buyer may not have thought to ask. Good SBA lenders use financial metrics, along with other financial indicators to gauge the financial stability of the business.

It's important to note that SBA lenders are more concerned with the financial viability and repayment ability of the business rather than what the business is listed for.