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How to Get a Loan to Acquire a Business

Are you a first-time acquirer? Discover how to get a loan to acquire a business and finance your transaction with the off-market buying experts at Chelsea Corporate.

Securing a loan to buy your first business

Business buyers often use a combination of debt and equity to finance a transaction. However, as a first-time buyer, you may need more support securing a loan, as you may be considered more of a risk as a borrower than somebody with a history of buying and selling businesses.

When initially meeting with lenders, be prepared with all relevant information, including your acquisition plans, future business ventures, financial background and position within the company. You will then be better positioned to decide whether an acquisition loan from a lender, such as a bank, will be the best option for your circumstances.

If it’s your first business acquisition venture, but you do own a similar business, the lender may underwrite the two businesses together. You may therefore need to provide the financial documentation of your current business as well as your credit history and personal tax returns.

When securing a loan to buy a business, you should also be prepared to provide the lender with the balance sheet, profit and loss statement and future projections of the business you wish to purchase.

Compare your acquisition loan offers

Before making a decision and accepting your first offer of a loan, you should first compare your acquisition loan options. Compare lenders interest rates, fees and other terms and conditions to find the best loan for your circumstances. You may also need to consider prepayment penalties, covenants, and the process of collateral appraisal.

Apply for an acquisition loan

Now you’ve considered your options, you can apply for an acquisition loan and begin the underwriting process. The time it takes to approve an acquisition loan varies from lender to lender. However choosing a loan company or bank you have previous history with can make the process more straightforward.

Acquire a business with Chelsea Corporate

Looking for business opportunities? Our experience and unique off-market approach mean we can help you avoid competition and buy a business through acquisition. Our approach makes all the difference, and we will find you the perfect company to buy. Contact Chelsea Corporate today on +44 (0) 20 3011 1373 or email info@chelseacorporate.com to find out more.