Business Acquisition Loans

Looking to purchase your dream business or buy out your partner?

Finding the right financing canĀ  be a challenge. Typically banks will only finance a very narrow set of parameters. Monarch is here to play a vital part in makingĀ  purchasing your dream business a reality.

Let us arrange financing with an SBA loan ranging from $300,000 to $5,000,000. Working with us gives you access to our established nationwide, regional and local lender relationships all in one place. Understanding your situation and helping you navigate through the SBA guidelines from underwriting to approval and funding is our utmost priority.

We help arrange business acquisition and partner buyouts through SBA 7a loans. SBA 7a loans provide a 10-year payback with no prepayment penalty for paying it off sooner. The ten year term allows for optimal cash flow with sustainable debt payments.

Qualifying is based primarily off cashflow, experience, credit and collateral. These loans require a minimum down-payment of 10%.

We realize that purchasing a business can be a life changing decision. Finding the right financing can also play a vital part in a making that transition manageable and successful. Together we can explore options and loan terms that are fair, competitive and standard for each individual situation.

Business acquisitions and start-ups are most commonly funded through SBA 7(a) financing because it allows for a lower down payment than a conventional loan and pushes the loan term out to ten years, which is longer than most conventional loan terms. Down payments can be as low as 10%-25%, depending on the lender.

Where does the SBA place their focus for underwriting purposes?

4 main areas:

Cash flow and projections.

Underwriting places a high level of focus on the historical cash flow of the business as well as financial trends such as gross revenues, profit margins, balance sheet trends, etc. With a change in ownership, projections and a business plan will also be required. Start-ups are more difficult due to lack of historical financials so the focus falls entirely on the projections, business plan, collateral and buyer’s financial strength and experience.

Experience.

With a business acquisition, underwriters are looking to evaluate how a buyer’s background, experience, education and skills overlap with the business being acquired. They also evaluate which employees will remain in the case of a business acquisition to get an understanding of the stability associated with the business transition.

Collateral.

The SBA allocates values to tangible assets such as commercial real estate, machinery, equipment, inventory, etc. An underwriter will closely evaluate and identify the amount of SBA determined collateral values for tangible assets. For loans that exceed $350k and fall short of business collateral coverage, the SBA may require personal assets be pledged to help secure the loan.

Financial Strength.

After reviewing the cash flow, trends and collateral associate with a business and the buyer’s industry related experience, the focus turns to the overall financial strength of the buyer. This includes current liquidity, post closing liquidity, credit scores, personal net worth, any and all outside income (W-2, affiliate businesses, etc.) and equity in personally held real estate for collateral purposes.
Each scenario deserves equal consideration for your individual situation. That’s where we come in.
For a free consultation please complete an application. It shouldn’t take more than 5 minutes and we will NOT be pulling your credit.