Acquisition Financing

Business Acquisition Financing

Many businesses have difficulty securing acquisition financing on their own. Acquisition financing is a general term that can mean a variety of things. It takes knowledge, time and market connections to source successfully. You need a large network of financing sources and structuring expertise to source on your own. It can take years to build the proper network and acquire the necessary expertise.

The business acquisition financing sector is specialized. It requires an experienced approach and market know-how for sourcing success. Most acquisition financing lenders think differently than banks and have their own set of qualifying criteria. Three ingredients are necessary to be successful in sourcing: a high performance lender platform, market expertise and a proven workflow.

We can help you with the business acquisition financing needed to buy a business.

Secure a business acquisition loan quickly with favorable terms

The financial recession that started in 2008 has affected nearly every aspect of the business world. The financing industry experienced perhaps the biggest change. Banks have become tight with credit and loan approval rates have dwindled as a result. Business acquisition loans are no exception. Banks that became accustomed to financing up to 80% of a purchase are now typically funding only around 50%. This means larger down payments are required from the buyers and seller financing is becoming more and more common.

According to a recent article in Inc. Magazine, the credit crunch led to an increase in seller financing after the Great Recession. The article explains that securing capital and the best financing terms for an acquisition can be challenging and has resulted in changes in the financial system.

Now, here is some good news: Securing business acquisition financing with more favorable terms IS possible. A business acquisition loan simply requires a little more preparation and flexibility by both the buyer and seller. Business acquisition financing can be used for financing a the purchase of an existing company, refinancing, or purchasing a franchise.

That’s where we come in.

We specialize in matching borrowers with favorable sources of funding – sometimes up to five different lenders. We have developed a network of funding sources to ensure that every one of our clients has the best possible chance of securing the small business loan they need to succeed.

Business acquisition loans are one of our specialties. We work individually with borrowers/purchasers to ensure that they present their very best position to lenders. Here are some ways to prepare for success before applying for a business acquisition loan.

What is the continued growth opportunity offered by the targeted company?
It’s important to look beyond a cheap purchasing price in order to truly understand the value of your purchase.

Have you created a strategic targeted growth plan for your newly merged companies?

Take the time to evaluate all aspects of both of your businesses. Lenders will appreciate seeing that you understand the ins and outs of the company you are acquiring.

Is your acquisition a good match for your current market and industry?

Lenders might not feel comfortable financing an odd couple merger.
Consider using seller financing with a term of 5 to 10 years to buy a business. Lenders feel more confident funding acquisition deals that involve seller financing. Also, seller financing involves less paperwork and does not require an appraisal.

Let us help you in taking this next step with your company’s growth. Call us at (732) 228-8088 for a consultation.

how can we help you?

Contact Midstreet Capital to help you achieve your goals, together.

Let us show you how we can help you achieve your goals, together.