How to get a small business loan to buy an existing business
Buyers struggle to know what documentation banks require, from business plans to personal financial history, leaving them unsure how to present a viable application. This lack of clear direction makes it difficult to satisfy loan officers and resolve concerns over personal debt or asset ownership during a joint application.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1brainstorming and weighing possibilities
- 2relying on family members to help out with costs
- 3doing initial research on the practical side of running the business
- 4Relying on a partner's professional designation or stronger financial profile to carry the application and sign guarantees.
- 5Trying to stack multiple small business administration loans across household members to fund sequential business ventures.
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“It seems impossible to buy a franchise absent liquid assets or a high net worth, and I's just trying to figure out how to stop having a near two hour commute each way five days a week.”source ↗
“I would love some advice on where to start when it comes to the purchase itself.”source ↗
“What ducks do I have to line up and in what formation for a bank to look at them and go "yeah, those ducks look like they're worth the investment" or something along those lines?”source ↗
“What do loan officers generally want to see when presented with a small business loan application of this sort? Fleshed-out business plan or just general facts and figures? My resumé of related experience?”source ↗
“My concern is whether my personal $10,000 debt and the fact that I don’t own a home could cause BMO to decline me individually even though we’re submitting a joint business application and my partner has stronger finances.”source ↗
Where this came up
People with this problem also raised
- 6Funding my business out of my own pocket
- 2How to fund inventory for a growing physical product business
- 3How to buy a small e-commerce business for under 20k
- 2How to avoid buying a 60-hour-a-week job instead of a business
- 2How to prove equipment eligibility and timing for tax credits
- 2Why do acquired businesses end up overvalued?