How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 business acquisition loan
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA business acquisition loans | $5,000,000 | 650 | with Fundera by NerdWallet |
SBA Express loan with Fundera by NerdWallet | Best for Fast SBA business acquisition loans | $500,000 | 650 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Online business acquisition loans | $500,000 | 660 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.0/5 Best for Business acquisition loans for equipment | $250,000 | 575 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 5.0/5 Best for Business acquisition loans for expanding an existing business | $250,000 | 625 | with Fundera by NerdWallet |
National Funding - Online Term Loan with Fundera by NerdWallet | 4.0/5 Best for Business acquisition loans with expanded credit qualification | $500,000 | 600 | with Fundera by NerdWallet |
TAB Bank - Term loan | Best for Bank small-business acquisition loans | $300,000 | 660 | |
Here are 7 business acquisition loan
Best for SBA business acquisition loans
Best for Fast SBA business acquisition loans
Best for Online business acquisition loans
Best for Business acquisition loans for equipment
Best for Business acquisition loans for expanding an existing business
Best for Business acquisition loans with expanded credit qualification
Best for Bank small-business acquisition loans
Max Amount
$300,000
Min. Credit Score
660
I'M INTERESTED IN:
Our pick for
SBA business acquisition loans
SBA 7(a) loans offer competitive rates and terms and maximum loan limits of up to $5 million. They can be a good option when you don’t meet bank eligibility requirements but still have good credit and strong finances.
SBA 7(a) loan
with Fundera by NerdWallet
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
Our pick for
Fast SBA business acquisition loans
SBA Express loans can typically offer faster approval times along with the same basic features as 7(a) loans — as long as the funding amount does not exceed the $500,000 maximum loan limit.
SBA Express loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
Our pick for
Online business acquisition loans
Funding Circle term loans can be used for growth and expansion, as long as your business has been in operation for a minimum of two years.
Funding Circle - Online term loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
with Fundera by NerdWallet
Our pick for
Business acquisition loans for equipment
Triton Capital offers equipment financing with flexible payment options of monthly, quarterly, annually, semi-annually or seasonally.
Triton Capital - Equipment financing
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
Business acquisition loans for expanding an existing business
Term loans up to $250,000 are offered by OnDeck to business owners who want to expand their establishment and have a minimum credit score of 625.
OnDeck - Online term loan
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
with Fundera by NerdWallet
Our pick for
Business acquisition loans with expanded credit qualification
National Funding offers term loans up to $500,000 that can be used for any business purpose and a flexible minimum credit score requirement of 600.
National Funding - Online Term Loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
600
with Fundera by NerdWallet
Our pick for
Bank small-business acquisition loans
TAB Bank offers term loans ranging in size from $30,000 to $300,000 with competitive interest rates and an online prequalification process.
TAB Bank - Term loan
Max loan
$300,000
Min. Credit score
660
Apr range
8.99-35.99%
What is a business acquisition loan?
How do business acquisition loans work?
- Down payment. Although you may ask for a specific loan amount, some lenders will offer you only a percentage of funding — and require that you supply the remaining percentage as a down payment. Down payments on business acquisition loans can be as little as 10% or as much as 30% or more depending on the type of financing, lender and your business’s qualifications.
- Business valuation. Lenders typically rely on a business valuation — an evaluation of the economic value of the company you’re looking to buy — among other factors, when determining the loan amount to offer. These valuations are often done by independent third parties who use business assets, future earnings and current market value among other factors to get a fair assessment of what the business is worth.
- Collateral. Collateral may also be required to secure your financing. In some cases, tangible assets from the company you’re looking to purchase can serve as collateral on the loan.
- Letter of intent. Lenders will often ask to see a signed letter of intent that spells out the terms of the sale of the business such as the purchase price, what assets are included in the sale and any liabilities that the new owner will take on. If you are concerned about making an offer before you have a loan, a clause can be included in the letter that states your offer is contingent on you getting financing.
Business acquisition loan requirements
- Business valuation.
- Letter of intent.
- Sales agreement.
- Franchise agreement, if applicable.
- Business financial statements.
- Business tax returns.
- Contracts and leases.
Pros and cons of a business acquisition loan
Pros
Cons
Types of business acquisition loans
Banks and credit union loans
SBA loans
Online loans
How to get a business acquisition loan
- Gather information about the business you want to buy. Gather as much as you can about the financials and assets of the business you want to buy. This will not only help you determine whether it’s a worthwhile purchase, but any lender is also likely to require financial records before financing a business acquisition.
- Determine if you qualify for the business loan. In addition to the financials of the business you’re purchasing, most lenders will want to see strong personal credit, and may ask for personal financials and assets as well.
- Compare lenders. Research several lenders to compare things like rates, fees and application process. You should prioritize lenders with good reviews, who are fairly transparent about their rates, fees and terms.
- Gather your application information based on lender requirements. Once you have decided on a lender, there will likely be additional required documents specific to them. The speed with which you can gather the additional documents will affect the overall timing of the application process.
- Apply for the loan online or in person, depending on the lender. Depending on the type of lender, you will submit your application online, over the phone or in person.
- Review your loan agreement. Make sure you review your loan agreement carefully and be clear on any discrepancies in the repayment terms, rates and fees.
- Receive funding. A lender may disburse the funds directly to the seller, or in a lump sum to you, depending on the amount and process.
Alternative options for business acquisition financing
- Seller financing. With seller financing, you’re borrowing the capital you need to purchase the business directly from the current owner. You work with the owner to create an agreement regarding terms and interest and then repay the owner directly.
- Equipment financing. If your business acquisition includes equipment, you might use an equipment loan to finance part of your purchase. Or if you’re buying a business that relies heavily on equipment, such as a construction business, you may be able to find an equipment loan to cover a majority of the costs. With equipment financing, the equipment typically serves as collateral on the loan.
- Self-funding. Though it can be risky, self-funding a business purchase by using personal savings or using your retirement fund can pay off if the business is a success. This option may be less risky when buying a business as opposed to starting one from scratch since you are likely purchasing assets, a customer base and more, and the numbers are already there to demonstrate the business’s potential. The risk, however, is that you may lose your retirement or savings if the business ends up failing.
- Friends and family loans. Turning to your friends and family for money may be easier when you’re purchasing an existing business with a track record of success. Borrowing from friends and family can save you money on interest and fees, and can potentially mean accessing capital fast by avoiding an application process; however, it’s still prudent to get some sort of agreement in writing to avoid personal disputes.
Find the right business loan
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.