San Francisco Bay Area :: Business Sales, Valuations, and Advisory Services for Privately Held Companies

Financing

There are only a handful ways to finance the sale of a business:

1. Cash (always)
2. Home Equity Loan
3. Conventional Bank Financing
4. SBA Financing
5. Seller Financing
   
   

Financing an acquisition is arguably the most important issue for potential Buyers.  Business Owners always seem to want all CASH and most Buyer's are not in a financial position to meet that expectation. 

You will always need to have some component of cash in your financing package. If you cannot provide all cash, there will need to be another source--perhaps the Seller would be kind enough to carry a note or you have sufficient equity in your home to secure a line of credit. Be cautious of the amount of financing so you do not extinguish all the earnings trying to repay debt.  There is no such thing as a zero-down business acquisition.

SBA Lending is typically the last resort after you've exhausted your cash, home equity, and Seller financing.  The reason is simple: SBA loans are very expensive!  However, if you have no other choice, they are great!  ABI maintains relationships with numerous SBA lenders throughout the East Bay and would be happy to refer you to one.