how to get a loan

Buying a business is a big step in your career, even if you’ve already done it before. While there are many factors to consider along the way, getting a loan to buy a business is one of the biggest. For starters, you’ll need to meet a long list of requirements with high standards before a bank will loan money to you. The type of loan you acquire matters. One of the best ways to obtain business loan financing is to go with a Rollover for Business Startup or ROBS, which allows you to use the funds from your retirement savings penalty free. Then, use the cash to cover 100 percent of your purchase or as a down payment on an SBA loan. This article includes how to get a loan to purchase a business.
SBA loans are partially guaranteed by the United States Small Business Administration (SBA). They are a good option for small business owners because they tend to be a safer option for lenders, which means you’ll be more likely to be approved. They are also a good option if you don’t have enough collateral to get a traditional loan from a bank because chances are you will still get approved. Out of all the different types of business acquisition financing, SBA loans have the most extended repayment options and most competitive interest rates. But in some cases, they can be difficult to qualify for. Furthermore, once you’re approved, you may have to wait up to 120 days or longer before you can get your money.

Most of the time, it’s easier to get approved for an SBA loan when you want to buy an existing business rather than a startup. The terms of the loans look similar to a traditional bank loan,how to get a loan and you may have to use some collateral. Typically, you can borrow up to five million dollars with an SBA 7a loan, but keep in mind that the lender won’t cover the entire amount of the purchase price. Because of this, you’ll need a down payment of around 10 to 20 percent. Interest rates are based on the current prime rate, which is typically around 6 to 9 percent. You can expect SBA loans to have a fee of at least 3 percent of the entire loan amount for loans that are priced over $150,000. You may also have applications fees, prepayment fees or third-party closing fees to consider. Repayment terms go up to 25 years for real estate and ten years for working capital. To get approved, you’ll need a credit score of at least 680 and at least three to five years of experience in a managerial level or higher.