Business acquisition loan

Funding for your business acquisitions


Understanding business acquisition loans

LOAN AMOUNT

$5,000- $5,000,000

TIME TO FUND

As Soon As 30 Days

LOAN TERMS

Revolving or 10-25 Years

INTEREST RATE

As Low as 5.5%

What can you do with a business acquisition loan?

Use a business acquisition loan to buy a business. This loan type will help you purchase an existing business or franchise, which means you can take advantage of that stellar business opportunity even if you don’t have the capital to purchase it outright.

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Benefits of a business acquisition loan.

A business acquisition loan can be customized to meet the needs of your company, whether you’re just getting started or expanding your existing company.

  • Flexible collateral requirements: Allows you to obtain a business loan without collateral other than the previous business’s assets.
  • Diverse financing structures available: Multiple types of business loans available for an acquisition, such as term loan or line of credit.
  • Protect your cash flow: Support growth without tying up your working capital.
  • Skip the startup stage: Own a mature business instead of building one from scratch. 

Use Startup business loan calculator to compare your loan cost.

Check eligibility

Minimum requirements for a business acquisition loan.

If your business doesn’t match some of the qualifiers below, it may be more challenging to receive funding from our lending partners.

CREDIT SCORE

600 or higher

MONTHLY REVENUE

$8000+

TIME IN BUSINESS

6 Months

Not qualified yet? We can help.

Lendio’s mobile app can help get your business ready for financing. Open a business bank account, get cash flow insights and stay connected to get updated when you have offers available.

Download on the App Store
Get it on Google Play
Know where your business stands with a centralized dashboard & relevant business insights.
Start separating personal & business expenses, with a no fee business checking account.
Projections for what to charge your customers, when to hire employees and upcoming expenses.

How to apply for a business acquisition loan.

Sure, you can go the bank route with a long application process and 75% rejection rate. But if you’re looking for financing in this lifetime, Lendio offers a faster, easier application process.

STEP
1
Fill out the 15-minute online application.

It’s secured with bank-grade encryption and SSL technology, so you know your information is safe.

STEP
2
Receive matches.

We pair you with loan options from our network of 75+ lenders. Our dedicated funding managers can help you weigh the pros and cons of each option.

STEP
3
Get funded.

Once you’re approved, you’ll be able to access your capital in as little as 24 hours.

Apply now

Why use Lendio?

$15+ BILLION

funded through us

75+

lenders in our network

400,000+

loans funded

“The Lendio process was amazing”

Sterling Hannemann
Co-Owner of Seven Brothers

“Lendio literally saved my business.”

Chloria Chandler
Owner of Bobbee O’s BBQ

Business acquisition loan FAQs

A business acquisition loan provides financing to small businesses looking to expand their reach by purchasing another business. There are a couple of different ways small business owners can utilize an acquisition loan. One option is to purchase an existing business outright. Maybe it’s a competitor or a related industry you want to expand in. Or maybe you’re interested in owning a business, but don’t want the hassles of navigating a start-up. Alternatively, an acquisition loan can also be used to purchase a franchise location.

  

Lenders review a variety of criteria when evaluating your application for a business acquisition loan. The importance placed on each factor may vary depending on the type of loan you apply for. For instance, a term loan, such as an SBA business acquisition loan, will typically require a down payment minimum. A line of credit application may place more emphasis on your revenue and cash flow.

For most small business loans, a lender will review factors like your credit history, time in business, and revenue to determine if you qualify. If you’re buying a business or franchise, your lender will look at slightly different criteria to ensure that you’re investing in a viable business, and in turn, will be able to repay the loan.

Be prepared for these specific application requirements for a business acquisition loan.

  • Credit review: Lenders look at both your business credit report and the personal credit reports of any partners with a minimum 20% ownership stake.
  • Revenue and debt: In order to make sure your business can handle the payments of your new acquisition loan, the lender reviews both your revenue and total debt payments.  
  • Minimum down payment: Some types of loans allow for a business acquisition with no money down. But others (particularly term loans) do require a down payment, usually ranging between 10% and 15% of the loan principal.
  • Business plan: Most lenders require an explanation of how you intend to use the funds to purchase a business and expand your existing operations.

You can get a business acquisition loan from a variety of sources including banks and credit unions, SBA lenders, and online lenders. Before getting a business acquisition loan, make sure to understand that where you get your loan from matters.

  • Banks and credit unions: Banks and credit unions provide competitive rates for business and acquisition loans, but they typically require credit scores of at least 700, a minimum of two years in business, and a sizable initial down payment.
  • SBA lenders: SBA loans are government-backed and come with more flexible loan terms and lower interest rates. However, they can be difficult to qualify for and can be slow to fund.
  • Online lenders: Qualification requirements through online lenders may be less strict than those through banks, credit unions, and the SBA. Funding may also be faster through online lenders. However, repayment periods may be less flexible and interest rates may be higher taking this route.

Like all loan types, there are benefits and drawbacks to getting a business acquisition loan.

Pros

  • Flexible collateral requirements: Allows you to obtain a business loan without collateral other than the previous business’s assets.
  • Diverse financing structures available: Multiple types of business loans available for an acquisition, such as term loan or line of credit.
  • Protect your cash flow: Support growth without tying up your working capital.
  • Skip the startup stage: Own a mature business instead of building one from scratch. 

Cons

  • Getting approved can be difficult: It can be difficult to get approved for a business acquisition loan without a good credit score and stable finances.
  • Interest rates can get very expensive: Make sure that the interest rate on your business acquisition loan isn’t so high that your business cannot be profitable.
  • Your loan may require a down payment: Depending on your lender and loan amount, you may be asked to pay a down payment on a business acquisition loan.

Business acquisition loan amounts range from $250,000 all the way up to $5,000,000. The amount you qualify for depends on a number of factors, including your credit score, company revenue, and existing debt. Every lender will review these factors to make sure your company can safely handle your new loan payments.

Focus on types of business loans that don’t require a down payment. Both lines of credit and revenue-based loans are good starting points when exploring your options. Comparing multiple loan structures from different lenders in Lendio’s network is a smart way to find the right type of business acquisition loan for your needs.

Lendio makes the business acquisition loan process as easy as possible. The application takes just 15 minutes and you’ll get a quick response. Plus, funding arrives in your bank account within 24 hours of getting approved.

There are more nontraditional, alternative options to consider when looking for a business acquisition loan. These can include angel investors, crowdfunding campaigns, family and friends, and more. Make sure to understand considerations and stipulations when deciding on a business acquisition loan.

Quickly Compare Financing Options from Multiple Funders

Applying is free and won’t impact your credit

Talk to a rep at (855) 853-6346
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