What most business owners don't realize is that by pre-qualifying their business for SBA loan business purchase financing they will increase the number of
potential buyers. I consult with many buyers who obtain larger SBA loans ($400K to $5M) to buy businesses and it always amazes my why more owners, business brokers, and agents don't initiate this step before putting a business for sale on the market.
By pre-qualifiying for financing a business owner will know if their business is qualified for 3rd party financing like the
SBA loan program and not waste anytime with buyers who may want to go down that route but may not be able to because the owners business does not qualify. Also since most SBA lenders I deal with only require 10% to 20% for a down payment this allows many more buyers a chance to potentially buy the business (instead of having to come up with a larger down payment).
To pre-qualify a business you will need to provide these documents:1. Previous 3 years of business tax returns
2. Previous 3 years of financials - profit and loss, balance sheet
3. Current copy of lease for the business
Other information that would be helpful:1. Account concentration - any client that provides more that 15% of business income
2. Business type and industry
3. Analysis of adjusted net income and add-backs
4. Assets and equipment that come with the business
If you are selling a business I highly recommend you get a
professional SBA loan pre-qualification before your try and sell a business!
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