Details About Business Acquisition Loans
Business acquisition loans can be difficult to obtain, so you should put in the time to perform a comprehensive review of the industry and the value of the business itself beforehand. The value of the business can be determined by the history of the business, name recognition, viability and goodwill of the industry, along with other factors such as inventory that is included and/or a transferable lease. However, no matter how attractive these intangible qualities appear to you, they may not transfer over when the business is purchased — especially in the eyes of a lender.
What do lenders look for?
In addition to a good credit score and solid financial history, lenders will want to see your business plan, history of industry experience, specific qualifications, and assurance that you have the capacity to make the business successful. They will also review the financial history of the business being acquired, including tax returns, cash flow statements, and outstanding debts.
Best practice tips:
- Purchase a business in an industry in which you have several years experience
- Do your due diligence on the business and the owner(s) before you decide
- A good credit score is very important – to improve your credit score click here
- Don’t forget to secure the digital rights such as web domains, email accounts, social media accounts, and passwords