Business Acquisition Loan
Financing used to purchase an existing business or franchise, sized around the purchase price, the target business's financials, and often the buyer's own equity contribution.
Lenders evaluating an acquisition loan look closely at the target business’s historical cash flow and financial statements, since that existing performance, not just the buyer’s own credentials, largely determines whether the loan can be supported after the sale closes.
SBA 7(a) loans are a common source for smaller acquisitions, while larger deals may combine senior debt with seller financing or mezzanine financing to cover the full purchase price without requiring the buyer to fund it entirely with cash or equity.
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