Getting Your Loan to Buy a Business Approved

Most loans for the purchase of a business get rejected because they are not packaged correctly, presented to the proper lender, or properly negotiated with the bank loan officer. Loans to buy a business take special care and handling.

Packaging a loan correctly:

To package a loan correctly you must understand what type of loan you are asking for. A loan supported by a business' cash flow will be packaged differently that a loan supported by a ton of collateral.

In all instances make sure your package demonstrates how the business is going to generate the cash flow to pay back the loan. Make sure you can back up every statement with verifiable proof. This is why it is often hard to finance new businesses. How do you prove something out of thin air. Existing businesses have existing cash flow to work with. If the cash flow does not completely justify the loan look into ways to improve the cash flow. Click here to learn more...

Presenting your loan to the proper lender is best done by talking to a cross section of lenders to find the right one. Rejection is just part of the process. If you are unsure who is the best type of lender select a few national banks and local banks. This is like dating in that you only need one. Different banks will take different risks. The two ways to find the right bank is to pay a broker who knows your market or make to many calls and face rejection yourself.

The best way to negotiate your loan package through to acceptance is to always talk to your loan officer with an open mind. Ask questions and be willing to make changes in your package and loan request. Remember the goal is to get the loan that will allow you to move forward. The bank is right until you have a loan closing.

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