Business Acquisition Financing: How to Get Your Finances in Order

Buying an existing business comes with real advantages — an established customer base, trained staff, and cash flow that's already proven itself. It's also more complex than starting from scratch, especially when it comes to financing the purchase.

Many first-time buyers stall out here simply because they don't know their options. The good news: there are several proven ways to fund a business acquisition, from seller financing to SBA loans, and just as many ways to strengthen your odds of approval. Below, we break down each funding source and what lenders will expect from you.

How to Finance a Business Acquisition

Here are the most common ways to fund the purchase of an existing business:

• Personal funds: The most straightforward option — if you've built up enough savings, using it avoids debt and interest altogether.

• Seller financing: Many sellers will finance part of the purchase themselves, effectively acting as the lender. You repay them over time, typically funded by the cash flow of the business you now run. Explore our structured seller financing solutions here

• Bank loan: Traditional bank loans for acquisitions are hard to land. Lenders want strong personal credit alongside a target business with solid cash flow and substantial assets.

• SBA loan: For many buyers, this is the strongest option on the table — especially the SBA 7(a) loan, built specifically for acquisitions like this. Guidelines are strict, though: interest rates have climbed alongside recent Fed rate hikes, and approval has gotten more competitive as a result.

• Leveraged buyout: This structure uses the target business's own assets as leverage to help finance its purchase, usually layered with loans or seller financing to cover the full price.

• Assumption of debt: Here, you take on both the business's assets and its existing liabilities. It's the only option on this list that requires sign-off from the business's current creditors, not just a lender.

• Unsecured loans: Based on your personal credit and income rather than the business's financials — flexible, provided your credit and employment history are strong. Explore our business acquisition funding solutions here.

How to Get Your Finances in Order for Lenders

Securing the money is only half the equation — you also need to be the kind of borrower a lender wants to say yes to. That starts with getting the right information in order before you apply. Lenders will typically look at:

• Your personal finances: credit score, tax returns, financial statements, and outstanding debts. If you already own a business, they'll review its credit score too.

• The finances of the business you're buying: balance sheet, business tax returns, and profit margins.

Jumpstart Finance has more than 30 years of experience funding business acquisitions. Our friendly team is ready to walk you through the qualification requirements and support your acquisition journey. Submit your deal here and connect with a Loan Advisor today.