Arizona Business Sales
professionals are knowledgeable and skilled in profitable and timely business
and property transfers. We provide business sales and acquisitions
services across a broad range of industries including retail, manufacturing,
wholesale, restaurant, automotive, service, biz to biz in many areas of the
state including but not limited to Apache county, Cochise county, Coconino
county, Gila county, Graham county, Greenlee county.
When
purchasing a business, there are a few crucial factors you should consider
before initiating the process. What you need to do is present yourself as a
strong and viable loan candidate and take advantage of a wide variety of financing
options available to you.
So,
what does it take to increase your viability as a loan candidate and bring your
goals to fruition?
It
is essential that you demonstrate your skills and industry expertise and
convince a potential lender of your ability to succeed. Typically, lenders look
for candidates who can prove that they will benefit enormously from acquiring a
business. How do you ensure that the transition process will run smoothly? Will
you keep existing managers on staff? Did you surround yourself with savvy and
reliable professionals who will help you facilitate the process? Have you
reviewed your credit before inviting a lender to review? Do you have the
necessary liquidity to provide a sufficient injection? Don’t forget that you
also need a solid and well-thought-out business plan that outlines your course
of action.
You
should do your homework and clearly identify the value of the business you are
about to purchase. Spend an adequate amount of time reviewing the financials
and performing a sufficient amount of due diligence. You may benefit from
joining efforts with a trusted financial advisor who will analyze the numbers
and help you effectively assess the value of the business. Keep in mind that
you may also need to ascertain the value of real estate, inventory, equipment
and other assets.
Securing
capital for an acquisition can be a daunting process. Below are a few viable
lending sources to take into account when acquiring a business:
Family, friends or “angel” investors
Be
prepared to invest between 20 % to 50% of the capital upfront. That’s what most
lenders expect from buyers. In case you are short on funds and not ready to
invest the required amount, turn to family and friends for help. As an
alternative, you may consider partnering with some wealthy individuals (also
known as “angel” investors), who will not only provide the funds, but also
offer their contacts and expertise and guide you in the right direction.
Small Business Administration (SBA)
Turning
to SBA may be a smart way to finance your business acquisition. Small-business
loans guaranteed by the U.S. Small Business Administration may provide flexible
financing for qualifying borrowers. If you have strong credit, can demonstrate
positive cash flow and solid management and industry expertise, you may be able
to initiate relationships with financial institutions and benefit from some of
the lending programs they offer. Please note that they may have great programs
for women, minorities or veterans.
Seller financing
You
can also ask the seller if he or she can provide financing and help you
successfully complete the process. In fact, some sellers may offer a reasonable
interest rate or encourage other lenders to invest in the venture.
Interestingly, this may be the simplest form of financing a business purchase.
It
is important to keep in mind that whatever option you choose, you have to cover
all your bases, gain as much knowledge as you can about the business
acquisition process and take advantage of various financing options. Sadly,
some business owners are unaware of all the financing sources available in the
market and miss out on the opportunity to own their own business. Furthermore,
all business transactions are open to negotiations.
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