The Situation: Business Acquisition Of E-Commerce Business

The owners of an e-commerce business selling high-end automotive tools and products wanted to retire from the business they started almost 15 years ago. They felt the business needed new ownership to reinvigorate the brand and grow the business beyond their capacity. An individual with product knowledge and experience selling goods online approached First Business Bank to acquire the business with an SBA loan. 

  • Business Transition Risk 
    With any business acquisition, there’s risk as a new owner takes over related to keeping operations consistent. The goal often is a seamless transition for customers, employees, and suppliers. 
  • Collateral Shortfall
    The business assets consisted solely of inventory that would turn over, quickly leaving little to no collateral to secure the bank loan.
  • Post-Closing Liquidity & Working Capital 
    The borrower contributed a large amount of personal liquidity as the down payment for the loan, leaving them in a lower post-closing liquidity position. 

The Solution: 7(a) SBA Loan From First Business Bank

First Business Bank, an SBA-designated Preferred Lending Partner, provided an SBA 7(a) loan totaling $1,170,000 to the borrower to acquire the business assets of this e-commerce company. 

  • Understanding the Right Structure 
    First Business Bank’s team approved a loan structure for the borrower to finance the business acquisition and funding for additional inventory and permanent working capital for the business. 
  • Dependability
    Our experienced team understands the e-commerce business model and delivered a structure the buyer requested — what we originally proposed — and a timely approval and closing.
  • Functionality
    Using an SBA 7(a) loan, First Business Bank offered a longer amortization, lower down payment, and proceeded despite a significant collateral shortfall on the loan due to strengths of the deal.