ENTREPRENEURSHIP THROUGH ACQUISITION
A Reliable Alternative To Chasing Unicorns
The Top 5 Loans to Finance Your Business Acquisition
Looking for the right type of loan to finance your business acquisition? There are a lot of options. Click here to learn a few of the best.
Finance your business acquisition
Here are top 5 loans to learn about
Looking for the right type of loan to finance your business acquisition? There are a lot of options. Read on to learn a few of the best.
Finance your business acquisition
A record $2.5 trillion in mergers was announced in the first half of 2018.
If you are looking to acquire a business, there may not be a better time.
The acquisition gives you access to experts, capital, and market power that can grow your enterprise and build your brand. Yet you may be wondering how you can make it happen.
There are a number of ways to finance your business acquisition. Here are five of the best loan options.
1. Small Business Administration Loans
Small Business Administration (SBA) loans are known for their competitive interest rates and long repayment plans. The SBA does not loan money directly. Instead, they partner with select banks and lenders to secure loans to business owners.
It is easier to get approved for SBA financing if you are an established business rather than a startup. This is because the lender can use your existing repayment history to prove your credibility.
It may take longer to qualify for an SBA loan than other loans. In addition, you will likely be required to provide a down-payment of at least 10%.
Interest rates on SBA loans vary depending upon the current U.S. prime rate. A repayment schedule will vary depending upon the type of business you are purchasing. It is shorter for working capital and longer for real estate.
2. Startup Loans
If you are a new business owner hoping to finance your business acquisition, a startup loan may be best for you.
These loans may be easier for new business owners to qualify for, but you will still need a solid business plan and a good credit history. One downside of startup loans is that they can restrict cash flow. And don't forget that you could be putting your own credit reputation at risk if the business doesn't work out.
3. Rollover for Business Startups
Rollovers for Business Startups (ROBS) allow you to access the money from your retirement to start a business without paying taxes or early withdrawal fees. The funds can be used for acquisition, working capital, or as a down-payment for other forms of financing.
A ROBS is not a loan, so there will be no debt to repay. It is also quicker to acquire than a typical business loan.
A ROBS usually requires a setup fee and a small monthly management fee. The biggest obvious drawback is that you will risk your retirement funds.
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4. Home Equity Line of Credit
A Home Equity Line of Credit (HELOC) is a line of credit secured by the equity you have in your house or apartment. You will likely need at least 20% equity in your home.
A HELOC can be a more inexpensive way to access your credit than other methods because they offer interest-only payments for the first few years of repayment. The downside is that you are risking your home if your investment does not work out.
5. Term Loans
A term loan offers a lump sum that can get repaid in fixed installments for a predetermined period of time. Generally, they are quicker to acquire than an SBA. You may, however, get held personally liable if your business stops making payments.
The Best Way to Finance Your Business Acquisition
The best loans to finance your business acquisition will depend on your experience, credit history, and type of business.
For more information on business acquisition options, read our blog today.
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BUSINESS ACQUISITION
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
What Is Entrepreneurship Through Acquisition? Your Guide to the Benefits
Have you heard of entrepreneurship through acquisition but are unsure of what this means? Click here to answer this and to learn why this is a great choice.
What is ETA?
Your guide to the benefits
Have you heard of entrepreneurship through acquisition but are unsure of what this means? Read through here to answer this and to learn why this is a great choice.
Entrepreneurship through acquisition
Many Americans are growing tired of working in corporate America. Here, they are spinning their wheels on a fixed salary and far too many hours. To make matters worse, their wages are barely increasing on a yearly basis.
Fed up, millions are responding to an entrepreneurial spirit and starting their own business. In fact, 27 million Americans are either starting or running a new business.
Pursuing an entrepreneurial opportunity is a wise decision. The profitability rate recently surged more than 25% in a single year.
Read on to learn about entrepreneurship through acquisition. Explore the benefits of acquiring an existing business over starting a new one.
What Are the Challenges of Starting a New Business?
Many entrepreneurs decide to start their own businesses. While some find success, this path is likely to see significant challenges.
The most obvious challenge to overcome is that you are starting from scratch. You do not enjoy the luxury of an existing brand.
There are no loyal customers or equipment to leverage off of. Also, policies and processes have yet to be developed.
You do not have existing employees or subject matter experts. Instead, an employee training program needs to be developed and provided to all new workers. There may be significant barriers to entry in the marketplace including established competitors.
What Are the Benefits of Entrepreneurship Through Acquisition?
Entrepreneurship through acquisition occurs when buyer(s) purchase an existing business. This includes pursuing franchising opportunities.
In this scenario, an entrepreneur finds a business for sale and pays a price to acquire it. This may come in the form of a lifelong small business owner who is retiring and looking to sell.
There are many benefits to this approach because the transaction may include many different items. For example, you may be acquiring the company’s machinery and supplies. Perhaps the company has popular social media accounts that you will take control of on day one.
Perhaps the greatest benefit is that an existing business has an established revenue stream. You do not have to stress over generating profit as it will be coming in from the start.
How Do Entrepreneurs Find an Existing Business?
Once you decide to forgo starting a new business from scratch, it is time to find an existing business. However, this is easier said than done. Businesses do not typically put up a for-sale sign on the storefront.
The good news is that there are online resources to pair entrepreneurs with business owners looking to sell. There are algorithms that help match your passions with existing businesses and franchise opportunities. Once financing is secured, you can get a business appraised and make an offer.
Glance through featured businesses for sale listed recently on BizNexus Marketplace
Wrapping It Up
The American Dream is alive and well. Now is the time to seize your opportunity and become your own boss.
Instead of working uphill with a brand new business, you should consider purchasing an existing business. This way, you can inherit an established brand and revenue stream.
If you want to learn more about entrepreneurship through acquisition, you can start your search for the next business opportunity by signing up to BizNexus.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to Buy an Existing Business: Tips to Find, Value, and Acquire Something Successful
Want to acquire something both pre-existing and successful? Click here to learn how to buy an existing business and put it on the path to success.
How to buy an existing business?
Tips to find, value, and acquire something successful
Want to acquire something both pre-existing and successful? Read on to learn how to buy an existing business and put it on the path to success.
How to buy an existing business?
Business acquisition is growing increasingly popular in the United States. Take franchising opportunities for example.
In 2020, there are more than 785,000 franchise establishments in the nation. This is the highest figure in the past 14 years.
Interest rates are still hovering near record lows meaning capital is cheap. The cost of money makes buying a new business more appealing than ever before. In addition, the nation’s economy is sitting on a solid foundation with strong consumer demand.
Read on to learn how to buy an existing business. Explore tips on how to find, value, and acquire a successful business investment.
Reasons to Buy an Existing Business
There are many good reasons for entrepreneurs to consider an existing business. For one, there will be a strong supply as Baby Boomers retire and look to sell.
From a business standpoint, you will inherit a proven business model. You can verify that the concept works simply by evaluating prior sales.
In addition, you get to leverage an established brand and product. The business comes with a loyal customer base, employees, inventory, and other assets.
Finding a Business For Sale
The first step in the acquisition process is finding a business for sale. Unlike homes, it is uncommon for a for-sale sign to be placed in front of the business. Existing businesses rarely advertise that they are looking for a seller.
Traditionally, investment bankers facilitate some business transactions. In other cases, accountants or lawyers will share information with prospective entrepreneurs. These professionals often get a heads up as they help plan the existing business owner’s retirement or other financial endeavors.
Another way to find a business for sale is by networking with local owners. However, these methods are old school and often lead to long waiting periods.
Modern entrepreneurs get to take advantage of online tools. There are online resources that use algorithms to pair together businesses looking to sell with entrepreneurs. Here, you can save search criteria like price and favorite businesses that you are interested in.
Your search may lead you to consider franchising opportunities. You can be matched up with a franchise that is in line with your passions.
Business Appraisal
Once the perfect business is found, you need to get an appraisal. In this process, finance professionals pour over the business to determine its value. Your team will review balance sheets, taxes, revenue statements, and more.
This appraisal is a critical step in getting financing to buy your new business. Unless cash resources are available, you can apply for a business acquisition loan. With cash or a pre-approval in hand, you can now make offers on existing businesses.
A Recap of How to Buy an Existing Business
Acquiring a business is not simple by any means. It takes a lot of research to find the right one. The good news is that there are professionals and platforms out there that can pair you with the best fit.
If you want to learn more about how to buy an existing business, sign up for BizNexus and start getting matched with opportunities today.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Financing the Purchase of an Existing Business: Different Financing Methods to Know
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. If you are looking into buying a business on your terms, you'll need to explore all options in front of you. If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. Financing the purchase of an existing business is a strategic move that you need to carefully consider.
Buy A Business Through Financing
Have A Look At Different Financing Methods
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. If you are looking into buying a business on your terms, you'll need to explore all options in front of you. If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. Financing the purchase of an existing business is a strategic move that you need to carefully consider.
It's important that you take the proper steps when you are looking to acquire a business.
As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it.
Follow these tips to see which form of financing suits you.
1. Ramp Up Your Own Funds to Allocate
When someone is looking to sell a business, there are countless arrangements that come into play.
The best thing you can do for yourself is to put up your own money if you have it. This way, you call the shots and aren't worrying about crazy interest rates or strict terms.
It's always best to have a nest egg set aside, and you can use this nest egg to your benefit when you decide to allocate some of your own money to acquire a business.
2. Find a Traditional Bank Loan
If you are looking into buying a business on your terms, you'll need to explore all options in front of you.
Getting a traditional bank loan is still an incredible option. Reach out to either a big bank, community bank or credit union to see what sort of loan options you can explore.
Make sure that they are feasible for your budget and that the terms are beneficial to your needs.
3. Talk to the Small Business Association
Be sure that you look into the Small Business Association (SBA) as an outlet when you'd like to get some lending.
These organizations are allies for small businesses such as your own and can help you get your hands on the funding that makes the most sense.
They'll give you access to the financing options that are most conducive to growth so that you are able to expand your business.
4. Use Your 401k to Roll Money Over
You can use your 401k as a tool to fund a business.
If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. The benefit of using a 401k is that you'll be able to do so without the same early withdrawal penalties that you would experience when taking the money out for other reasons.
5. Get Financing Through the Seller
Finally, it also pays to seek financing from the seller.
A number of sellers will offer you ongoing financing at a great rate, which can expedite the sale of the business. Be sure to thoroughly read through the terms to know what you are getting.
Financing the Purchase of an Existing Business: Use These Tips
Financing the purchase of an existing business is a strategic move that you need to carefully consider. If you're in the market for buying a new business, let these tips guide you.
Our company can help you out so that you can find the assistance that you need.
For more information on buying a business on your terms, stay tuned and get in touch with us for more help.
Financing the Purchase of an Existing Business: Different Financing Methods to Know
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. It's important that you take the proper steps when you are looking to acquire a business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it. Follow these tips to see which form of financing suits you.
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business.
It's important that you take the proper steps when you are looking to acquire a business.
As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it.
Follow these tips to see which form of financing suits you.
1. Ramp Up Your Own Funds to Allocate
When someone is looking to sell a business, there are countless arrangements that come into play.
The best thing you can do for yourself is to put up your own money if you have it. This way, you call the shots and aren't worrying about crazy interest rates or strict terms.
It's always best to have a nest egg set aside, and you can use this nest egg to your benefit when you decide to allocate some of your own money to acquire a business.
2. Find a Traditional Bank Loan
If you are looking into buying a business on your terms, you'll need to explore all options in front of you.
Getting a traditional bank loan is still an incredible option. Reach out to either a big bank, community bank or credit union to see what sort of loan options you can explore.
Make sure that they are feasible for your budget and that the terms are beneficial to your needs.
3. Talk to the Small Business Association
Be sure that you look into the Small Business Association (SBA) as an outlet when you'd like to get some lending.
These organizations are allies for small businesses such as your own and can help you get your hands on the funding that makes the most sense.
They'll give you access to the financing options that are most conducive to growth so that you are able to expand your business.
4. Use Your 401k to Roll Money Over
You can use your 401k as a tool to fund a business.
If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. The benefit of using a 401k is that you'll be able to do so without the same early withdrawal penalties that you would experience when taking the money out for other reasons.
5. Get Financing Through the Seller
Finally, it also pays to seek financing from the seller.
A number of sellers will offer you ongoing financing at a great rate, which can expedite the sale of the business. Be sure to thoroughly read through the terms to know what you are getting.
Financing the Purchase of an Existing Business: Use These Tips
Financing the purchase of an existing business is a strategic move that you need to carefully consider. If you're in the market for buying a new business, let these tips guide you.
Our company can help you out so that you can find the assistance that you need.
For more information on buying a business on your terms, stay tuned and get in touch with us for more help.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.