Lender Pre-Qualified Businesses
Why You Should Get Your Business Pre-Qualified for Financing
One of the most important things a business owner/seller, agent or business broker should do is pre-qualify the business for SBA loan business purchase financing for potential business buyers before they put the business on the market!
Why should I do that since it’s the buyers responsibility to get the financing?
As business owner, you should know that finding the right financial institution/lender can drastically delay the selling process. It wastes valuable time that no business seller can afford.
When you get your business pre-qualified for financing it tells you several things about selling the business. First, if there is real potential for a buyer to get financing – so the buyer can cash the seller out and not have to take back a note. Or it can tell you that no business buyer has a chance to get financing based on your business’s financial and tax information so you’ll know you’ll have to take back a note.
Before you put your business on the market, it is good to know your options upfront before the negotiating starts on possible deal structures! Another great benefit to getting your business lender pre-qualified is that you’ll find out if the selling price is within the ballpark according to different lenders. No lender will loan on a business purchase if they feel the “ratios are not in line” with the selling price – a good way to know if you should lower the asking price of your business.
As a business buyer, choosing a business that has been lender pre-qualified saves you a great deal of time. It is also a great indication that the business you are thinking of buying is worth the selling price and that it has solid financial and tax records.