Obtaining A Loan For Buying Businesses

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by a searcher
in South San Jose, San Jose, CA, USA

5yrs ago

Obtaining A Loan For Buying Businesses

Hello Everyone,

I am new to buying businesses, but have built and owned 4 of them. I need some help with obtaining or help with learning how to do this.

I am open to suggestions and opinions, so please feel free to jot down anything that might help.

redacted

Thank you,

Aaron G.

2 Likes

408 Views

reply by a searcher 5yrs ago
from Northeastern University in New York, NY, USA

Heather - great article. Thanks so much for sharing. Just one question. On a SBA-approved deal that offers 85% of the funding, is there any way you can you use seller financing for the other 15%??

reply by a lender 5yrs ago
in Yorba Linda, CA, USA

Ed, thank you! No, the SBA rules require 10% equity. half of that "equity" can consist of a seller note, but only IF that seller note is on full stand-by (no principal or interest payments permitted) for the term of the SBA loan (10 years) We only offer the 5%/5% structure to key manager buyers because there is little to no transition risk, and because they often are getting the business at a reasonably low multiple. For 3rd party buyers, we require all of the 10% to come from cash equity. I hope that helps.