When it comes to starting a business, there are many options to consider. One great option is to buy an existing business. This can be a great way to get a business up and running quickly, without having to go through the process of starting from scratch. But what about financing the purchase of a business? Can an SBA loan be used for this purpose? In this article, we’ll answer this question and provide more information about SBA loans and buying a business.

Can I Buy a Business With an SBA Loan?

The simple answer is yes, you can buy a business with an SBA loan. The Small Business Administration (SBA) guarantees loans to businesses of all sizes, from small to large. These loans can be used for most business purposes, including long-term fixed assets and working capital, and can also be used to buy an existing business.

In addition, the SBA has pre-approved some franchisors for SBA loans. This makes it easier for those who wish to buy a franchise to obtain financing. However, an SBA loan cannot be used to partially buy into a business. It must be used to purchase the full ownership of a business. Furthermore, the buyer needs to have a business valuation of the business they wish to purchase.

SBA Purchase Loan

The SBA Purchase Loan is a loan that is partially guaranteed to a bank by the SBA. This makes it an attractive option for those looking to buy an existing business. The loan can be used for a range of business purposes, including debt refinancing, working capital, equipment, and more. In addition, it can be used to purchase another company, provided that it is for 100 percent of that entity.

Conclusion

In conclusion, SBA loans can be used to purchase an existing business. This can be a great option for those looking to buy a business without having to go through the process of starting from scratch. If you have questions about business brokers or about selling a business in Atlanta, visit Atlantabusinesses.com for more information.

Is it possible to purchase a business using an SBA loan?

It is possible to sell a business with the help of an SBA loan, however, there are certain steps that must be taken first. The most important one being obtaining approval from the lender.

What activities are not permitted with an SBA loan?

An SBA loan can only be used for expenses related to the business, not for personal matters like credit cards, mortgages or student loans.

Is it possible to use an SBA loan to buy real estate?

Yes, SBA 7(a) and SBA 504 loans are available for the purchase of real estate, as well as for the construction of new structures, renovation of current buildings, and expansion of existing properties.

Is it possible to use an SBA EIDL loan to facilitate the sale of a business?

The SBA requires authorization for any organization that has taken out a loan of more than $25,000 from the Economic Injury Disaster Relief program if they intend to change ownership of their business through a merger, stock sale, or asset sale.