Business Acquisition Loans Explained

What are Business Acquisition Loans?

Business acquisition loans are not something that everyone has to deal with. Only a few entrepreneurs out there that are looking to grow their business will have to utilize business acquisition loans. Some people will have to utilize them more than once if they are trying to grow an empire.

Business acquisition loans can also be used to buy out a partner in a company. It is a structured form of financing that will help you create attractive terms for all parties.

There are many different options out there for financing your next business acquisition. Some you may have considered. Others that you may just be learning about. Taking the next step when acquiring a business is a huge decision and it can impact you for the rest of your life. That is why determining the right type of acquisition loan for you is important. So what type of business acquisition loans are out there?

Bank Financing

Traditional bank loans will typically ask you to but 20% down at the beginning. You will then pay a fixed monthly payment every month. Depending on what type of funding you are applying for, the terms can be different. For example, if you are applying for an SBA loan there is less flexibility in the way you can structure the deal.

Bank financing can be extremely hard to secure especially if you have no business credit or poor personal credit.

Seller Financing

In this funding scenario, the seller develops its own offerings for business acquisition loans. The seller acts as the bank would and collects the payments directly from the buyer. The buyer will pay their down payment directly to the seller and continue to make payments directly to the seller. The benefit to both parties is there is no set amount made for the down payment and the terms are negotiable. Both parties simply have to agree to the terms to get the deal done.

This is also a more personal option because the new business owner is working directly with the seller who has usually invested their own time and money into the business. The seller has a desire to see the business succeed. The buyer and the seller can determine the best form of payment. This includes a portion of sales or fixed payment each month. This is also the fastest way to closing on a true loan product.

Alternatives to Business Acquisition Loans

While certainly viable, the fact of the matter is that business acquisition loans are not always present. Many businesses may never have the opportunity to use them, so alternative funding options are extremely important.

eBusiness Funding helps businesses that may struggle with traditional lenders. To do this, we provide merchant cash advances. These are accessible to a wider spread of businesses than bank loans or private lenders. 95% of businesses that meet our simple requirements qualify for funding. All you need is to be in business for at least six months, with over $10,000 in monthly revenue. With us, it’s not about past credit history or collateral, but about your business’s potential.

It’s important to us that you use the funds we offer in the most helpful way possible. As a result, so we place no limit on how you spend our advances. Payroll, expansion, repairs, spend on what you need! We also get you your funds fast, sometimes as soon as 72 hours after you first apply. Repayment is also very simple. Rather than large monthly payments, we take a set part of your future sales. This is set up by our skilled consultants. This percentage stays the same, so if business slows down, you pay less.

Interested? All it takes to begin is filling out a simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.