SBA Loan Funds Time Sensitive Business Acquisition
THE SITUATION: CASH-STRAPPED BUSINESS OWNER FACES TIME-SENSITIVE ACQUISITION OPPORTUNITY
A business owner of two very successful security alarm companies learned a leading competitor was retiring and selling his business. The owner was interested in the business acquisition but had recently acquired another security alarm business and didn’t have access to capital. The business owner came to First Business Bank to evaluate the target business and secure new financing for the acquisition.
The client faced a lack of equity to pay cash for the business and lacked a down payment to qualify for a conventional bank loan.
The client faced a collateral shortage due to the amount of intangible asset value included in the business acquisition.
Lack of Time
The client needed a prompt, expert financing solution because of a competing back-off offer.
THE SOLUTION: 7(A) SBA LOAN FROM FIRST BUSINESS BANK
First Business Bank, an SBA-designated Preferred Lending Partner, provided a 7(a) loan to fund the acquisition.
Lower Down Payment
As an expert in SBA lending, First Business Bank facilitated a lower down payment option through an SBA 7(a) loan than what’s typically available with conventional financing.
The 10-year-term set by First Business Bank with its SBA 7(a) loan is a longer payback term than typical conventional financing. The longer loan term helps the business to boost business cash flow, which it might not otherwise accomplish as quickly.
First Business Bank’s SBA division has processed hundreds of SBA loans and has a deep pool of SBA specialists consistently delivering loans to the closing table, which made it possible for the buyer of the security alarm company to hold off the bidding competition and successfully close this strategic acquisition.
"The key to making and closing the deal came down to understanding the dynamics of the deal WE WORKED HARD TO UNDERSTAND THE ACQUIRING BUSINESS INSIDE AND OUT and made sure the loan files moved in one fluid, continuous motion all the way through the process to meet the tight deadlines required by the project.“
— Mark Davis, SBA Business Development Officer, First Business Bank