Acquiring Minds How to Choose Your Lender When Buying a Business
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Oct 14, 2021 Lisa Forrest, a lender at Live Oak Bank with expertise in SBA financing, shares valuable insights into choosing the right lender for business acquisitions. She discusses the nuances of SBA loans, particularly for SaaS and eCommerce businesses. Lisa emphasizes the importance of preparing for conversations with lenders and understanding financial health. She also highlights common pitfalls, the significance of cash planning, and why the current market is favorable for buyers. Overall, her tips empower entrepreneurs to navigate the financing landscape confidently.
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Dual Focus of SBA Loan Evaluation
- SBA loans evaluate both the buyer's financials and the target business's cash flow.
- About 75% of the loan assessment focuses on the business's cash flow to cover debt service.
Prepare Once for Multiple Deals
- Provide your personal financial statement and resume once; lenders revisit for multiple deals.
- Use these documents to focus on analyzing cash flow for each new business opportunity.
Fit Matters: Sales vs Office Work
- Some searchers discover a great business but realize roles or work environment don't fit their skills.
- One client abandoned a deal after realizing the job required desk work, not sales, then referred it to another buyer.