Leveraged Buyouts (LBO)

Advantages and Disadvantages of a Small Business Leveraged Buyout

Leveraged buyouts (LBO) are a popular way to finance business acquisitions by using debt financing. This article focuses on the pros and cons of using an LBO buy a small business. We discuss the following: Advantages of using an LBO Disadvantages of this strategy Common misconceptions For a detailed explanation of LBOs, please read “What […]

What is a Leveraged Buyout (LBO)? How Does it Work?

A leveraged buyout, commonly referred to as an LBO, is a type of financial transaction used to acquire a company. Buyouts are highly leveraged transactions. They use equity from the buyer and debt secured by the target company’s assets. Most small business LBOs aim for a ratio of 90% debt and 10% equity, though these […]

Requirements for a Business Acquisition Loan

This article discusses the main requirements you must meet to qualify for an SBA 7(a) loan. This type of loan is one of the most common financing tools used by small business owners to finance a business acquisition. A Quick Word on SBA Loans The term “SBA Loan” is a bit of a misnomer because […]

Leveraged Buyout Financing for Small Businesses

Most people consider leveraged buyouts to be solutions that can only be used to acquire larger businesses. However, nothing about a¬†leveraged buyout¬†is specific to larger business. The concept can be used to acquire smaller businesses. There is a catch, though. Just because the concept can be used by smaller businesses, it does not mean that […]

Equity Injection Sources For a Business Acquisition Loan (Down Payment)

Most business acquisition loan providers require that buyers of a business provide a down payment, often referred to as an equity injection, in order to get a loan. The equity injection can range from 5% to 30% of the transaction value. In this article, we discuss why lenders require a down payment and describe four […]