Asset purchase or stock purchase: what changes for the financing?The form of the deal decides what the lender's lien attaches to, which company owes the money, and which of the seller's problems come along. Lenders read the purchase agreement before they write the commitment.Can you finance a business purchase that is mostly goodwill?Most small-business prices are mostly goodwill, and most of those deals get financed. A collateral shortfall changes the structure and the lenders who will do it, not whether the deal can close.Can you finance buying a business whose earnings are declining?Lenders size the loan to where earnings are going, not where they were. A buyer who priced the business on a better year has a gap to close, and a story about the decline will not close it on its own.Can you use a 401(k) rollover (ROBS) to fund the down payment on a business?Lenders accept retirement money moved into a business as equity. What they do not do is carry any of the risk that comes with it, which stays with the buyer.Do lenders require a quality of earnings report to finance an acquisition?A quality of earnings report can be a rule, a lender's expectation or an expense the deal does not need. Knowing which one applies decides when to commission it and what it has to prove.Do lenders require industry experience to buy a business?A buyer without years in the industry is not disqualified. But the lender is lending against the business being run well after the seller leaves, and it will want to see exactly who is going to do that.Do you have to personally guarantee a loan to buy a business?On an SBA loan, yes, if you own 20% or more. Outside SBA the answer depends on how much of your own money is in the deal and how hard the debt leans on the business.Does the SBA require a business valuation when you buy a company?In most SBA acquisitions, an independent appraiser values the business before the loan closes. The valuation does not set the price, but it does set the most the SBA loan can be.How do earnouts interact with acquisition debt?An earnout is purchase price the buyer has not paid yet. To a lender, it is a future claim on the same cash that services the loan, and it has to be structured so it never competes with debt service.How do employees or managers finance buying the company from the owner?Managers usually know the business better than any outside buyer, and have far less money. In many management buyouts, the owner who is selling becomes a lender too, and the one whose terms decide whether the bank can say yes.How do escrows and holdbacks work with acquisition financing?Every purchase agreement promises the buyer something about the business it is buying. The question is where the money comes from if a promise turns out to be false, and the lender financing the deal has a view on each answer.How do independent sponsors get debt financing without a committed fund?An independent sponsor finds the deal and raises the equity for it one deal at a time. Lenders will finance that model, but their first question is always the same: is the equity real?How do lenders account for the buyer's salary when sizing an acquisition loan?The buyer's pay is the one cost in an acquisition model the buyer gets to choose. Lenders know that, so they do not let the buyer's choice decide the loan.How do lenders decide if the purchase price is too high to finance?A lender never asks whether the price is fair. It asks how much debt the business can carry, and the price is financeable only if equity and seller paper can cover the rest.How do lenders view buying a business from a retiring owner?When the owner holds the customers, the license and the pricing in their head, the lender is underwriting the handover as much as the earnings. A buyer who answers that in the file gets a better hearing.How do SBA 7(a) loans finance a business acquisition?The 7(a) program is the most common way to buy an established small business with debt. Its rules are fixed; the lender's judgment about your deal is not.How do searchers finance their first acquisition?A searcher asks a lender to trust someone who has never run the business. The answer lenders give depends far less on the searcher's resume than on the target's records and the plan for the first year.How do seller notes work alongside an SBA loan?Seller financing often closes the gap between the price and what a bank will lend. Under SBA's current rules, how the note is written decides whether it rescues the deal or breaks its coverage.How do you finance a business acquisition that includes the real estate?Buying the building can stretch the loan and lower the payment. It can also absorb cash the business will need in its first year. The structure decides which.How do you finance a dental practice acquisition?Lenders like dental practices, which makes it easy to get a term sheet and easy to accept the wrong one. The practice's production, its payers and its lease decide what a lender will actually do.How do you finance an acquisition bigger than the SBA $5 million limit?Once a deal needs more debt than one 7(a) loan can provide, the question changes from how to fit inside SBA to whether SBA is still the right program at all.How do you finance an add-on acquisition for a platform company?Once a company starts buying others, the lender stops underwriting one business and starts underwriting a group. The combined figures have to be built in a way a lender can check.How do you finance buying a bar or tavern?Bars can be financed, but fewer lenders want them than want restaurants. The ones that do check three things before anything else: the liquor license, the cash and the lease.How do you finance buying a business from a parent or relative?Lenders finance family successions all the time. What they will not finance is a handover that looks like a family arrangement rather than a sale.How do you finance buying a car wash?A car wash is a real estate deal and an operating business at once, on a site that is hard to use for anything else. How it is financed depends on which half the buyer is really paying for.How do you finance buying a chiropractic practice?Most chiropractic practices are one doctor's patients, one doctor's schedule and one doctor's billing habits. A lender financing the purchase is asking whether those patients will keep coming to someone new, and whether the collections are what they seem.How do you finance buying a coffee shop or juice bar?A café's value sits in its location, its lease and a daily habit its customers have formed. Almost none of that is collateral, so the lender underwrites the cash flow on the tax returns and the buyer who will run it.How do you finance buying a collision repair or body shop?A body shop's customers mostly arrive because an insurer sent them. Lenders finance the purchase when the file shows those referral relationships, the certifications and the permits all survive the change of owner.How do you finance buying a consulting firm?A consulting firm owns almost nothing a lender can sell. What it has is clients who keep hiring it, and the whole underwriting turns on whether they will keep hiring it once the seller is gone.How do you finance buying a courier or delivery company?A courier company is a set of delivery contracts, a roster of drivers and a fleet that wears out. Lenders finance the purchase when the contracts will survive the sale and the cash flow still works after the vans are replaced and the insurance is repriced.How do you finance buying a CPA or accounting firm?An accounting practice is almost all goodwill, and the goodwill is client relationships that were built by the seller. Lenders finance these deals readily when the file shows how those relationships will move to the buyer.How do you finance buying a daycare or child care center?A child care center is a licensed operation in a specific building, staffed to ratios the state sets. Lenders finance these purchases when the license, the enrollment and the director all survive the change of owner.How do you finance buying a division or product line from a larger company?A division has customers, staff and a history, but it has never had its own books. Lenders cannot size a loan on figures the parent company never produced, so the buyer has to produce them.How do you finance buying a florist?A flower shop is a small purchase with a few very large weeks a year and almost nothing a lender can repossess. Lenders finance it on the shop's order history, the channels that bring orders in, and a buyer who can keep them coming.How do you finance buying a gym or fitness studio?A gym's dues look like recurring revenue, and lenders treat them that way only after they have seen who is paying, who is leaving and what members have already paid the seller for.How do you finance buying a hair or beauty salon?A salon's value walks in and out of the door every day on its stylists' schedules. Lenders finance the purchase when the file shows the chairs stay full after the seller hands over the keys.How do you finance buying a hardware store?Much of what a hardware store buyer pays for sits on the shelves. Lenders finance these deals when the inventory is counted, the wholesaler relationship carries over and the earnings hold up once the seller's family is paid for its work.How do you finance buying a home health care agency?A home health agency's value sits in its license, its Medicare enrollment, its referral sources and its clinicians. Lenders finance these purchases when the file shows all four carry over to the buyer, along with a clear view of the liabilities that come with them.How do you finance buying a landscaping company?A landscaping company earns its year in a few months and pays its lender in all twelve. Lenders finance these businesses when the buyer can show which revenue renews, who runs the crews, and how the winter gets paid for.How do you finance buying a laundromat?A laundromat looks simple to finance: machines, a lease and a steady stream of customers. The hard part is proving how much of that stream is real, and how long the machines and the lease will last.How do you finance buying a law firm?Clients are free to leave the day a practice is sold. Lenders finance law firm purchases anyway, when the file shows why the clients will stay.How do you finance buying a medical practice?A physician practice is a steady credit once it is paid by insurers under its new owner. The hard part of the loan is the months in between.How do you finance buying a pet grooming or boarding business?Grooming follows the groomers, boarding follows the seasons, and a kennel's permits and property can matter as much as its earnings. Lenders underwrite each part of the business on its own terms.How do you finance buying a plumbing company?Plumbing is one of the steadier trades a lender sees. The loan depends on how much of the work is emergency service the company owns, and how much rides on builders, warranty companies or the seller's license.How do you finance buying a property management company?A property management company sells recurring fees under contracts its clients can usually cancel on short notice. Lenders finance these purchases when the file shows the doors will stay, the trust money is whole and someone licensed will run the company.How do you finance buying a quick-service restaurant or franchise?In a franchise purchase the franchisor effectively sits at the lending table: it approves the buyer, sets the remodel, and fixes how long the brand stays over the door.How do you finance buying a self-storage facility?A storage facility is mostly real estate with a small operating business inside it. Lenders size the loan on the income the property has actually produced, after the costs a new owner will really pay.How do you finance buying a shipping and mailbox store?A shipping store's sales figure mostly belongs to the carriers. Lenders look past it to the margin the counter keeps, the mailbox holders who renew, and the franchisor who has to approve the buyer.How do you finance buying a sporting goods store?Much of what a buyer pays for in a sporting goods store sits on the shelves. Lenders care how much of it will actually sell, when in the year the cash comes in, and whether the brands that fill the store will keep shipping to a new owner.How do you finance buying a tax preparation business?A tax preparation office collects most of its year in a few months and then waits. Lenders finance these purchases when the buyer can show the clients will come back next season and the cash will last until they do.How do you finance buying a veterinary practice?Lenders like animal hospitals. What they need to see is that the revenue belongs to the practice, not to the veterinarian who is selling it.How do you finance buying an auto repair shop?Lenders finance independent repair shops readily when the work stays with the shop rather than leaving with the seller. The file has to show who fixes the cars, where they are fixed, and what the ground under the bays has seen.How do you finance buying an excavation or site-work company?An excavation company is an equipment fleet that earns its keep on bid work. Lenders underwrite both halves: what the iron is worth, and what the work leaves over after the iron is replaced.How do you finance buying an industrial equipment repair business?An industrial repair company earns from plants that cannot afford to stop. Lenders like that demand, and then spend most of their time on who does the work, who the customers are and what the trucks and tools are really worth.How do you finance buying an insurance agency?An agency is a book of renewals and the relationships that keep them renewing. There is almost nothing else to lend against, so the lender underwrites retention, commission quality and the handover from the seller.How do you finance buying an optometry practice?An optometry practice is two businesses under one roof: a clinic that bills insurers and an optical shop that sells frames and lenses. Lenders underwrite both, and then ask whether the patients will stay once the doctor they know has gone.How do you finance buying out a business partner?A partner buyout loads new debt onto a business that is not changing hands, run by someone the lender can already judge. That helps, but the departing partner's share still has to be paid for out of the same cash flow.How do you finance the purchase of a bakery?In many bakeries the most valuable asset starts work at three in the morning and is about to sell. Lenders want to know what the business earns once someone else is doing that work, and what a buyer actually gets for the goodwill.How do you finance the purchase of a building supply company?A lumberyard or building supply dealer is a retailer that extends credit to contractors, holds a yard full of commodity inventory and rides the building cycle. Lenders underwrite all three, and the structure usually needs a line of credit beside the acquisition loan.How do you finance the purchase of a commercial printing company?A printer is a book of customers running through a plant full of machinery. Lenders value the machinery conservatively and the customers skeptically, and the file has to answer both.How do you finance the purchase of a convenience store?A convenience store's sales figure flatters it: much of what goes through the register is the state's lottery money or low-margin tobacco. Lenders underwrite what the store keeps, and the hours it takes to keep it.How do you finance the purchase of a dry cleaner?Acquisitions make up an unusually large share of SBA lending to dry cleaners, so lenders know these files. The deals that fall apart usually fall apart on the history of the site, not on the earnings of the business.How do you finance the purchase of a flooring company?A flooring company sells material and installs it, often through a showroom, a builder program or commercial bids. Each channel carries different risks, and the lender prices the mix.How do you finance the purchase of a freight brokerage?A freight broker owns no trucks, and most of what it bills passes straight through to carriers. Lenders look past the gross revenue to the spread it keeps, the shippers and agents who produce it, and the cash it takes to pay carriers before shippers pay.How do you finance the purchase of a funeral home?A funeral home sells trust, and trust is attached to a name, a building and a licensed director. A lender wants to know how much of it survives the sale, and what promises the buyer inherits.How do you finance the purchase of a gas station and convenience store?Lenders like the land under a gas station and worry about what is under the land. The tanks, the fuel supply contract and the store's inside sales decide the loan.How do you finance the purchase of a grocery store?A grocer keeps a few cents of every dollar it sells, so small moves in margin, shrink or rent decide whether the loan gets repaid. Lenders underwrite those cents, and everything a new owner has to apply for again.How do you finance the purchase of a hotel or motel?A hotel is real estate that has to earn its keep every night. Lenders take the property as collateral, but they size the loan on how the rooms perform.How do you finance the purchase of a janitorial or commercial cleaning company?A cleaning company sells a book of contracts that customers can usually cancel on short notice, and a workforce that can walk. Lenders finance it readily when the file proves both will stay.How do you finance the purchase of a liquor store?A liquor store sale is really three purchases: a license the state must approve, an inventory counted the night before closing, and a location the landlord controls.How do you finance the purchase of a machine shop?A machine shop has more collateral than most small businesses, which helps. But the machines only earn money for customers who have approved the shop, run by people who know how to quote and program the work.How do you finance the purchase of a marketing or advertising agency?An agency has no inventory, no plant and often no long contracts. A lender financing one is betting that clients who can leave on short notice will stay with a new owner.How do you finance the purchase of a painting company?A painting company owns a few vans and a lot of goodwill. The lender is lending against the phone ringing, the jobs being sold and the crews showing up after the seller leaves.How do you finance the purchase of a pet store?An independent pet store lives on customers who come back every few weeks for the same bag of food. Lenders want to know whether those customers will keep coming back to a new owner, and what the store sells that a website cannot.How do you finance the purchase of a physical therapy practice?A therapy practice is paid by insurers on a delay, staffed by licensed clinicians who can leave, and fed by referrals it does not control. Lenders underwrite each of those, and the cash gap after closing.How do you finance the purchase of a remodeling company?A remodeler has no recurring revenue and few hard assets. What a lender finances is the sales engine and the backlog, and whether both survive the seller's exit.How do you finance the purchase of a restaurant?A restaurant has little a lender can repossess and sell. The loan rests on reported sales, a lease that outlasts it, and a buyer who can run the room without the seller.How do you finance the purchase of a roofing company?A roofing company's best year is often the one after a big storm, and that is exactly the year a seller wants priced. Lenders spend most of their time working out what an ordinary year looks like.How do you finance the purchase of a specialized trucking company?A specialized carrier is two things a lender values separately: a fleet that can be appraised, and a safety record, insurance history and customer list that cannot. The deal is financed on both.How do you finance the purchase of a staffing agency?A staffing agency has almost no hard assets and pays its workers before its customers pay it. Lenders finance it anyway, but only when the file shows the margin, the payroll float and the customers that will stay.How do you finance the purchase of a trucking company?A trucking company comes with real collateral, and that collateral wears out on a schedule. Lenders care less about what the trucks are worth today than about what it costs to keep the fleet running.How do you finance the purchase of an assisted living facility?An assisted living facility is a building and a licensed care business at once. Lenders underwrite both, and the license is what makes the building worth what the seller is asking.How do you finance the purchase of an auto parts store?Most of what a buyer pays for in an auto parts store sits on the shelves. The lender's job is to work out what that stock is really worth, who supplies it, and who buys it.How do you finance the purchase of an electrical contracting company?An electrical contractor's value sits in its license, its crews, its backlog and, for project work, its bonding line. A lender and a surety both have to be comfortable with the new owner.How do you finance the purchase of an engineering firm?An engineering firm owns almost nothing a lender can repossess. It owns licenses, client relationships and a team of engineers, and the loan is only as good as the part of each that stays after closing.How do you finance the purchase of an existing franchise location?Buying a franchise that is already open looks safer than opening a new one, and often is. But the lender is not lending against the brand. It is lending against this location's record and the years left to run it.How do you finance the purchase of an HVAC or plumbing company?Lenders like home-services businesses. They lend against the earnings that stay once the seller leaves, and the file has to show which earnings those are.How do you finance the purchase of an independent pharmacy?A pharmacy's earnings run through permits, payer contracts and a prescription file that all have to survive the sale. Lenders underwrite the handover as closely as the history.How do you finance the purchase of an IT services or managed services company?An MSP has almost nothing a lender can repossess. What it has is contracts that renew every month and engineers who keep clients happy. Lenders lend against the first and worry about the second.How does customer concentration affect financing an acquisition?A business that depends on a few customers can still be financed. But a change of ownership is the moment those customers are most likely to reconsider, and the lender will structure the deal around that risk.How does financing work when you buy a business with partners or outside investors?The ownership table decides who signs the guarantee, whether the deal is eligible, and how much of the investors' money the lender treats as equity. It is easier to set it with the lender in mind than to change it after investors have been promised terms.How does seller rollover equity affect acquisition financing?A seller who keeps a stake in the business lowers the cash the buyer needs and stays invested in the result. Whether a lender treats that stake as equity depends on the fine print of the shareholder agreement.How is a sale to an ESOP financed?An ESOP lets an owner sell to the employees with real tax advantages. It does not change how much debt the company can carry, which is why the seller often waits for much of the price.How much equity do you need to buy a business?The minimum is a rule. The right amount is whatever makes the coverage, the valuation and the buyer's own balance sheet hold up — and lenders check all three.How much seller financing is typical when buying a business?Buyers ask how large a seller note should be. Lenders ask a different question: what the note is allowed to take out of the business while their loan is outstanding.How much working capital should you finance when buying a business?The seller usually keeps the cash. The payroll, the supplier deposits and the slow month are yours from the first day. Size them before you size the loan.How should the financing contingency in a letter of intent be written?Two words, "subject to financing", can sit in a letter of intent and mean almost nothing. The contingency that protects a buyer and wins over a seller names the loan it depends on.SDE vs EBITDA: which number do lenders use to size an acquisition loan?The earnings figure on a business listing is built to show what one owner takes home. The figure a lender sizes the loan on is built to show what is left after someone is paid to do that owner's job.Should you buy a business through a holding company?A holding company can make later acquisitions, investors and succession simpler. But the lender decides how the entities sit on its loan, and a structure it did not approve is expensive to fix after closing.Should you talk to a lender before signing an LOI?Once a price is in a signed letter of intent, the only levers left are more equity, more seller paper or a smaller deal. The time to learn what the business can borrow is before the number is written down.What are the steps to finance the purchase of a business, from LOI to closing?An acquisition loan moves through a fixed sequence of gates. Knowing who holds each gate tells a buyer where the deal will actually wait, and what to start early.What change-of-control consents do lenders check when you buy a business?A lender sizes an acquisition loan on earnings that depend on contracts, licenses and permits. If any of them can end or needs approval when the owner changes, the lender wants that settled before it funds.What do lenders need to finance an acquisition?An acquisition file answers three questions: what the business earns, what exactly is being bought, and who is buying it. Every document on the list answers one of them.What does 'cash-free, debt-free' mean in an acquisition?The phrase sounds settled. It isn't: what counts as debt is negotiated line by line, and every item the seller leaves in the business is borrowed money the buyer's lender did not size for.What happens to the seller's existing loans when you buy a business?The new lender funds only when every existing lien on the business is paid off, released or subordinated. A filing nobody knew about is a common reason a closing date slips.What if the seller's financial statements don't match the tax returns?Most small businesses for sale carry two sets of numbers: the books the owner runs the company on, and the returns filed with the IRS. The lender will size the loan on one of them, and it is rarely the larger one.What is a sources and uses table for an acquisition, and how do you build one?It is the first page a lender reads, and it is where most acquisition financings quietly go wrong: a line that was never in the table turns up at closing and has to be paid for by somebody.What is a working capital peg, and how does it affect acquisition financing?The peg decides how much working capital the seller must leave in the business at closing. Set it too low and the buyer pays for the same receivables twice: once in the price, and again with borrowed money.What subordination terms will a senior lender require on a seller note?Outside the SBA program a seller note can be paid while the senior loan is outstanding, but only on the senior lender's terms. A seller who first reads those terms at closing can reopen the whole deal.What's the difference between a lender term sheet and a commitment letter?A buyer with a signed term sheet can feel financed. The lender has usually agreed only to look closely. The purchase agreement's dates should be set against the commitment, not the term sheet.Why do acquisition loans get declined?A decline reads like a verdict on the business. Usually it is a verdict on the structure or the evidence, and both can be changed before the next lender sees the deal.Why does the landlord lease matter when you finance a business purchase?For a business that runs from rented premises, the lease is part of what the lender is financing. A short term, or a landlord who will not sign, can stop a loan that has already been approved.