Financing a small business acquisition

Author: Bizilla.com-business for sale

The quickest way to expand a small business is through buying another company. Most often, small businesses will not be able to afford the immense cost. But despite common intuition, small businesses can buy another business for[relatively little down payment.
The most common means of acquiring the necessary financing is through investors.
Because investment involves the highest win-win potential, it is often the go-to resource for small businesses – just as it is for entrepreneurs.

Bank loans are the second most popular method. More so than with investors, businesses should make sure their credit is solid and reputable before moving ahead with bank lending, especially now that banks have tightened their lending policies in the wake of the financial collapse.

It is also smart to apply for a bank loan with a Small Business Administration guarantee. If an institution qualifies, the SBA will ensure banks a return on their investment, making the process less stressful.

Still, it is near impossible to buy a business for no money down. Despite the litany of financing options, some amount of personal funds will likely be needed.

“The next time someone says you can buy a decent business … with nothing down, run away from them as fast as you can,” writes Art Hamel for EzineArticles.com. “Because chances are they’re trying to sell you on an idea that simply doesn’t exist.”