When securing financing for a business acquisition, lenders evaluate several critical factors that can shape the terms of the loan. These include collateral requirements, your debt service coverage ratio (DSCR), and down payment expectations. Lenders also look at borrower credit and experience, as well as industry expertise to assess the viability of the business. The loan structure is important, with options like SBA loans, Parri Passu loans, and USDA loans for rural acquisitions offering different benefits. Additionally, lenders factor in geographical preferences, approval times, and loan covenants. In some cases, you may even explore airball (uncollateralized) loans where tangible assets aren't a key factor.
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