Using the SBA Loan to Purchase a Business
When hiring a business broker Escondido, the first question clients ask is if the broker will help secure an SBA loan. The Small Business Administration’s (SBA) loan programs are very popular with buyers who wish to finance the purchase of a business. There are so many SBA lenders in San Diego. But which lender should you work with?
At So-Cal Business Brokers, we are highly familiar with the SBA loan processes and have the contacts of the most reputable SBA lenders in San Diego and Imperial counties. We have partnered with local partners working for SBA preferred lenders across the state that we can connect you with. What is more is that as you consider the SBA loan, our business brokers Escondido will educate you on what to expect when looking for these loans. We will also enlighten you on the other financing options.
What is an SBA loan?
This is a loan that is guaranteed by the US Small Business Administration. The guarantee represents the part of the loan that the SBA will repay to the lender if the buyer defaults. When searching for a lending partner, we always recommend working with lenders that are designated as SBA preferred lenders. These lenders have SBA preapproval to work with the SBA guaranteed loans.
Loan process
Once you submit an application for the SBA loan, you will need to present the acquisition to the lender for a review. The lender will take a look at the financials that a business has to determine if its cash flow will be adequate to service the loan. The lender will also take a look at the personal financials of the buyer to determine if they qualify for the loan amount they requested. After all the requirements are met, the buyer, lender, business broker and seller will collaborate to move the transaction forward.
At So-Cal Business Brokers, we are committed to helping you qualify for the SBA loan. We will help you get ready well in advance before you submit an application for the SBA loan. Our business brokers Escondido have helped many business buyers secure SBA loans. We use our understanding of the loan application process to increase your chances of qualifying.
Moving forward
The lender has to obtain proof from the buyer which shows the buyer has the personal funds needed to support the transaction. The buyer must also prove that they have obtained insurance for the business; they have collateralized the loan and have put down at least 10% equity. The business seller will be required to carry part of the loan to serve as security which shows the lender that the parties are all invested in the success of the deal.
Our business broker Escondido will be with you throughout the process. To learn more about our services or about the SBA loans, we encourage you to schedule a free consultation with us. We look forward to working with you.