Business Acquisition Loan Prequalifications Explained

Summary: Many new business buyers request a prequalification letter from a lender before looking for opportunities. They hope this will show sellers they are ‘prequalified’ to buy their company. Unfortunately, business acquisitions don’t work that way. Lenders can provide a prequalification letter only after their initial due diligence of the business you want to buy. […]

Small Business Case Study -Landscaping Company (Business Acquisition)

This article presents a case study of an acquisition of a small landscaping company. The landscaping company was selling for $700,000 and was acquired using a conventional structure. In this study, we cover the following: The business: SpringSprout Landscaping The buyer: Jolene Jones Choosing a financing strategy Proposed deal structure Transaction challenges Final structure Outcome […]

How to Finance a Trucking Company Acquisition

Acquiring an existing freight carrier can be challenging for new buyers looking to buy a small business. This article discusses how entrepreneurs can finance a trucking company acquisition. It provides you with the basic foundation of knowledge to understand your options and develop the best strategy. We cover: Advantages of carrier companies How are trucking […]

Finance the Acquisition of an Electrical Contracting Business

Buying an electrical contracting business can be an attractive option for a new entrepreneur. Construction trades have some advantages over other industries. This article covers the essential points buyers need to keep in mind to increase their chances of getting their acquisition funded. We cover: Advantages of a construction trade business Financing options Lender evaluation […]

How to Finance a Plumbing Company Acquisition

Finding the right way to finance a business acquisition can be challenging for new buyers. This article helps you understand how to finance a plumbing company acquisition and provides you with insights into how lenders evaluate these transactions. These insights help you increase your chances of a successful acquisition. We cover: Why are plumbing company […]

How to Finance an HVAC Business Acquisition

Heating, ventilation, and air conditioning (HVAC) companies have always been attractive acquisition targets for entrepreneurs. Many HVAC companies are small, locally owned, scale well, resist recessions, and have clients with recurring maintenance contracts. These features make HVAC companies attractive to entrepreneurs. These features are also why many buyers target HVAC opportunities and other construction trade […]

MBO Case Study – Acquisition Carve-Out of a Vertically Integrated Company

This article presents the case study of a management buyout (MBO) of a small company with two vertically integrated business lines. This case study shows a transaction in which the seller carved out and sold one of the business lines to a company manager. The seller kept the other line of business as a stand-alone […]

15 Red Flags to Watch for When Buying a Business

Most entrepreneurs believe that buying a business is less risky than starting a business from scratch. The risk is lower because buyers can examine the company before making the purchase decision. This article discusses 15 red flags that buyers should be aware of when acquiring an existing company. 1. Owner’s reason for selling Owners have […]

What is Seller Financing? How Does it Work? (Business Acquisition)

Seller financing is a common financing component of many business acquisitions. It’s a type of loan that the seller of a business offers to the buyer. The loans are privately negotiated between the participants and usually have competitive terms and rates. In this article, we discuss: What is seller financing? Advantages to the buyer Advantages […]

What are Add Backs? (Buying/Selling Businesses)

Add backs are specific business expenses that can be added back to the seller’s discretionary earnings (SDE). Consequently, add backs can increase the SDE. Add backs are important in small business acquisitions because they affect the SDE, which ultimately determines the company’s valuation. In this article, we cover: What is an add back? Examples of […]