- SBA Loans:
- These are government-backed loans typically used for small business acquisitions. They offer fairly low interest rates and long repayment terms but are often difficult to qualify for and can have long approval times.
- Conventional Loans:
- Conventional business loans from banks or private lenders, often used for acquisitions. These loans are more straightforward compared to SBA loans and typically offer lower interest rates, but they usually require the business to meet certain financial standards.
- Private Capital Financing:
- Capital groups may provide access to private lenders that invest in businesses or business acquisitions. This strategy involves a private investor becoming a shareholder in the acquiring company, often in exchange for a minority or majority stake.
- Mezzanine Financing:
- Mezzanine financing combines debt and equity financing and is often used when traditional debt financing does not cover the full cost of acquisition. Capital groups may provide a combination of a loan and an equity stake in the business.
- Asset-Based Loans (ABL):
- These loans are secured by the assets of the business being acquired, such as inventory, receivables, or equipment. In certain cases, we may work with lenders to structure an asset-based loan to help fund the acquisition.
- Bridge Loans:
- Bridge loans provide short-term financing to cover the gap between the acquisition and securing longer-term financing. These loans can be a temporary solution until the buyer can secure a more permanent loan, such as a conventional loan or SBA loan.
