If you lay awake restless at night with a dream to start a business but don?t have the money, you are one step away from being a business owner. The secret to taking the next step and becoming a business owner is learning how to finance a small business purchase. Keep reading to discover valuable information about different business financing options that can help make your dreams a reality.  

How to Finance a Business Purchase?

Capital is important when starting or purchasing a business. In addition to having funds to start or purchase the business, you?ll also need funds for working capital. When it comes to financing a small business purchase you may need to combine one or more of the following financing methods. Let?s take a look at some of the most common ways to finance a small business purchase. . . #1. SBA Loan The SBA (Small Business Administration) itself does not lend money but rather it provides a guarantee of repayment and guidelines for the lender. Only SBA-approved lenders can offer SBA loans. Many banks and online lenders are SBA approved lenders. SBA loans are considered by many as the best way to finance a small business purchase. Although they may have a lengthy approval process, it?s worth overcoming the challenges if you qualify. To qualify for an SBA loan you should have decent credit and at least a 20% down payment. The 20% down payment can be financed using other sources if necessary. #2. Your Own Funds Using your own funds may be one of the simplest and cheapest ways to finance a business purchase. Funds could include savings, retirement accounts, home equity, and more. While you may have some funds that you can put toward the business purchase, it?s uncommon that you can finance the entire purchase with your own cash. Most individuals use some of their own cash combined with other financing sources. #3. Personal Loan Personal loans can be used as a way to finance a small business purchase. Acorn Finance partners with lenders that offer personal loans up to $100,000 with terms up to 12 years. Most lenders issue funds as a lump sum and do not have any spending restrictions. This means you can use the funds for just about anything you would like. Personal loans can also be a smart way to finance some of your own living expenses in the early stages of starting a new business. #4. Traditional Bank Loan Qualifying and securing a conventional loan from a commercial bank can be challenging compared to other options. Most banks approve loans and lend money based on assets rather than business plans. Most small businesses do not have many assets. You can see where the challenges begin. In addition, the borrower should have excellent personal credit, substantial assets, and a reliable track record. Getting a conventional loan that is guaranteed by the SBA can be a better option.

How to Finance a Small Business Purchase?

As discussed above, an SBA loan can be one of the best ways to finance a small business purchase. SBA loans are designed to help small businesses grow and succeed. Any of the options listed above can be used for financing a small business purchase.

Ways to Finance Buying an Existing Business

Financing an existing business can be much easier than financing a new business. Most existing businesses already have success established making them easier to get funding for. In order to finance an existing business purchase, you can still use the same financing methods. However, it should be easier to meet the qualifications and get approved for a loan. In addition you can use seller financing, leveraged buyout, or assumption of debt to finance an existing business purchase.

How Can I Qualify for Business Purchase Financing?

In order to qualify for business purchase financing you should have a credit score of 580 or higher. Also, you should have a detailed business plan and financial documents prepared. If you have credit challenges we recommend that you use a cosigner or provide collateral to increase your chance of approval.

How Hard Is It to Get a Business Loan to Buy an Existing Business?

Getting a business loan for an existing business should be easier than getting a business loan for a new business. Existing businesses should already have trained employees and established assets, customer base, and cash flow. All of these reasons may make it easier to get a business loan. However, getting a business loan can come with its own set of challenges for new and existing businesses.

How Can You Get a Loan to Buy a Business With Bad Credit?

If you have bad credit you may still qualify for a small business loan or financing to buy a business. The first step to finding financing is researching. That means if you are reading this, you are on the right track. We recommend applying for a personal loan if you have bad credit. The funds can be used for just about anything and a personal loan may be easier to qualify for. If you would rather use another business financing option you should create a detailed business plan, find a cosigner, and provide collateral to increase your chance of approval.

How Can I Apply for Business Purchase Financing?

No matter what kind of business purchase financing you are applying for, you?ll most likely start by completing an application. Acorn Finance provides a secure platform that can connect you to multiple lenders that can provide personal and business loans. Your credit will not be affected by applying through Acorn Finance. Here are 3 easy steps to apply for a loan using Acorn Finance?

Conclusion

In conclusion, if you want to purchase or start a small business, financing options are available. Financing a successful business is similar to running a successful business; you should avoid putting all your eggs in one basket. It may be wise to use a mixture of financing options to start or grow a business. If you are looking for business financing options you should visit Acorn Finance. Discover business purchase financing. . . explore your options today!