If you desire to acquire another company, it is important to know that having immediate capital on hand isn’t an impenetrable obstacle. Take heart and consider the possibilities offered by business acquisition loans.
Reasons to Acquire Another Business
There are many reasons to consider acquiring another business including facilitating added topline growth, expanding a company’s customer base, consolidating competition, building market share, adding products or significant technologies to be more attractive to more customers, expanding the company’s talent base, and stabilizing financials. Business acquisition loans can help accomplish the strategic objectives of an acquisition.
Ways to Finance an Acquisition
There are many ways to finance an acquisition including 100 percent company cash financing, a purchase that offers equity to the owners of a firm to be acquired, developing an earnout for a selling company, creating a leveraged buyout, issuing bonds, and developing a joint venture with a partnering company. Further, business acquisition loans include asset-backed loans based on the value of a targeted company, third-party financing, traditional bank loans, and SBA loans.
Using SBA Loans to Finance an Acquisition
To receive SBA business acquisition loans, a business must trade in the United States, it must be a for-profit business, and it must have owner-invested funds. SBA loans are attractive because they offer better rates compared to conventional loans. SBA-approved lenders can be more confident in lending because these loans are backed by the Small Business Administration. Loans also offer favorable repayment periods. Additionally, the SBA offers the assistance of learning resources and counseling. However, it is important to plan early because SBA loans usually take longer than conventional loans.
To obtain SBA business acquisition loans, preparation requires knowing the amount of money needed and its specific purpose, a well-developed business plan, your business financials, your experience and credit history, and a means for loan collateral.
Seek Expert Financing Assistance
Contact Jasema Capital for customized financial solutions. Our financial experts offer a wide range of versatile financing options to meet your needs.