October 31, 2022
If you’re interested in running a business but you don’t want to build one from the ground up, purchasing an existing one is a great option.
You first need to decide what business you’re looking to purchase. If you don’t already know of a business for sale, don’t worry. There are several ways to find one. You can save some legwork and find a broker who helps transfer businesses. Another choice is to use a website that features companies for sale. Craigslist and Facebook Marketplace can be good resources, but websites like BizQuest and BizBuySell are likely to be even better.
You’ll want to investigate why the current owner is selling their business. Visit the site if you can. Purchase a product they sell and try it for yourself. Look to see what the online reviews have to say. Search for competitors. Find out if there’s any pending litigation involving the business.
It’s important to know if there are associated permits and licenses. If the business has a product or service that has specific zoning or environmental requirements, you’ll need to know so you can be vigilant and remain compliant with those requirements. It can take a long time to get some certificates, which may affect the time you have to close the deal.
You have several options when it comes to financing. Think about which would be best for your cashflow situation.
Use your own money and purchase with funds you have immediately available. You won’t owe anyone anything, but you can run into obstacles, like not having that money as a safety net if something unforeseen happens.
Another way to purchase a business is through seller financing, where the seller of the business acts as the lender. Typically, you make monthly payments until the sale price is covered. It can be helpful to have the seller involved in your purchase for a longer period.
SBA 7(a) loans are one of the best ways to buy a profitable, existing business. The Small Business Administration allows you to borrow up to $5 million for various business purposes, including business acquisition. There are requirements to obtain an SBA 7(a) loan, so it’s critical to work with a knowledgeable, experienced lender, like Fund-Ex Solutions Group. We specialize in helping small businesses, whether they’re just starting or changing ownership. Our team has decades of combined experience and the know-how you need to close the deal on your new business.
If you’re interested in purchasing a business using an SBA 7(a) loan, Fund-Ex Solutions Group is here to help. Contact us to schedule a consultation.