Just as a business broker can be a key resource for finding a good company to purchase, a skilled business acquisition finance specialist is an important ally when seeking the money needed to complete the transaction.
To benefit from the services of loan professionals, it's useful to know how they can help and how to use them to come up with the best loan package in a timely manner. Doing this correctly can enable you to complete a deal for the business you want to buy instead of watching your financing contingency expire while someone else becomes the company’s owner.
The four services you need from a business loan professional are:
1. Pre-qualification--Don't wait till you’ve found the business before seeking out the best sources of financing. Ask the loan specialist to help you get pre-qualified with two or three lending institutions. This process enables a buyer to know how much she’ll be able to borrow and at what interest rate and terms. This is valuable information to use in determining what you can afford. And pre-qualifying serves as a test of your ability to borrow, letting you know, for example, if you need to work on cleaning up your credit record before applying for a loan.
2. Identifying the best lenders and financial institutions for your situation--One of the most important services provided by a business acquisition finance professional is knowing which institutions are currently making loans of the type the buyer will need, as well as which of the prospective lenders is in a position to review applications promptly. This service prevents the problem of working with a lender whose backlog of applications means a long wait. With a deadline on a loan contingency in a business purchase contract, the buyer doesn’t have much time. The experienced loan service professional knows which institutions to contact and also which individuals at each lending company to work with.
3. Monitoring--Because circumstances in the business lending marketplace can change quickly, it’s critical to have a loan professional remain in contact with the two or three lenders who’ve been targeted as the best possible sources for business purchase funds. By staying on top of the market, the loan specialist will be aware of changes in the capabilities of various lending institutions that may aid or hurt a buyer’s ability to get financing when required.
4. Follow up--Working with the underwriting team at any lender from whom you’ve requested money, the business lending service specialist will make sure your application is moving through the process, not running into unnecessary delays. Follow up also is important in order to find out if the loan offer will be different from what was requested.
The smart buyer knows what services he'll need when working with a business acquisition finance professional, and makes sure to take advantage of these services in order to succeed in buying a good business.
About The Author: For over 25 years Peter Siegel, MBA has provided niche business purchase financial advisory and loan broker services with SBA Loans, Non-SBA Loans, Retirement Plan Conversions, Hard Money, Gap/Bridge Financing, Note Restructures, etc. He assists with financing for: Business Purchases, Business With Real Estate Purchases, Franchise Resale Purchases, New Franchise Purchases, Pay Off Existing Seller Notes, Partner Buyouts, Employee Buyouts. Peter Siegel can be reached direct toll free at 888-983-1632 regarding getting professionally pre-qualified, advisory & loan placement services.