Summary: A leveraged buyout, commonly called an LBO, is a type of financial transaction used to acquire a company. Leveraged buyouts combine substantial debt financing with a small equity component from the buyer. Buyers typically use LBOs because debt amplifies the results of their investment. However, this feature can be a drawback if the acquisition […]
Frequently Asked Questions
How to Get a Business Acquisition Loan
Summary: Most small business acquisitions are financed using a loan. While larger acquisitions have many financing options, smaller transactions typically rely on Small Business Administration (SBA)-backed financing. This article discusses how to get an acquisition loan to buy a small business. We review what you must have in place before you apply, how to get […]
Requirements for a Business Acquisition Loan
Summary: Business acquisition loans backed by the Small Business Administration (SBA), typically through the 7(a) program, have the simplest qualification requirements. Unfortunately, this has led to misconceptions. Qualifying for these loans is easier than qualifying for conventional acquisition loans. However, they are not easy to get. Lenders evaluate these opportunities carefully to ensure they meet […]
Equity Injection Sources – Business Acquisition Loan
Summary: Most business acquisition lenders require that buyers of a business provide a down payment, often referred to as an equity injection. The equity injection requirements range from 5% to 30% of the total transaction value. The percentage varies by transaction based on the details of the opportunity. In this article, we discuss: 1. Why […]