Financing Solutions

Many buyers come to us with the concern that they cannot raise the capital required to purchase the business they have been researching. At Sunbelt California, we take care of all your financing needs. We have very good relationships with several aggressive SBA lenders that we will introduce you to and several other lending institutions and financing solutions. We will walk you through the entire process and ensure that you feel comfortable and confident every step of the way. There are many different avenues to pursue the financing you need, some of the most common are listed below:

SBA Financing
Sunbelt provides assistance in securing business acquisition loans through SBA preferred lenders. Government secured loans are available in many cases and will include a review of the buyer and the business to be financed. This type of financing usually requires the buyer's personal guaranty. Buyer's who qualify can usually get loans for up to 80% of the purchase price with up to a 10-year loan term.

Conventional Acquisition Loan
The availability of these loans depends heavily on the buyer's credit rating with less emphasis on the strength of the business. You can expect a higher down payment, possibly up to 50% of the purchase price.

Home Equity Line of Credit
Because of low interest rates and often no loan fees, home equity loans are often the cheapest way to generate the capital necessary to purchase a business. These loans are only limited by the amount of equity a buyer has in his/her home and his/her ability to pay back the loan.

Seller Financing
Sellers will consider financing as a way to receive the full value of the business. Some sellers are open to this type of financing because it means they don't pay taxes on the entire purchase price of the business when the deal closes. Instead they only pay taxes on the payments they receive from the buyer as they are received. In addition to this tax advantage, the payments also secure an income stream for the seller for several years. Seller financing supports the idea of confidence in the business as well as a continued commitment to success - both of which are appealing to buyers. Such financing is usually structured as a term loan, consulting agreement, or con-compete agreement.

Buyer's Cash
Typically 20% to 50% of the purchase price comes from the buyer's cash reserves. The seller and/or banks are usually more willing to finance a portion of the purchase price if the buyer can show his/her commitment by investing a portion of their cash on hand. The buyer must also consider reserves to be used for operating capital.

Regardless of the financing method used, we will guide you through the entire process. Please feel free to ask your Sunbelt agent for more information.