Financing Larger Business Acquisitions

Financing Larger Business Acquisitions

Hey Beau, I’ve been watching your videos for quite a while. I enjoy them a lot. Keep going!
I’ve been eyeing this business I’d love to figure out how to buy. They manufacture custom furniture. They’re looking at about $9 million for a sales price.

I know the SBA 7a is capped at $5 million.

Are there any other loan products that offer higher leverage like the SBA product with with a higher limit?

Cashflow is there for the business. I’m a strong borrower.

Interested in hearing your take on this.

Thanks,
Andre

In this episode, Andre expresses interest in buying and manufacturing custom furniture for a business with a sales price of around nine million dollars. He knows that the Small Business Administration (SBA) loan is capped at five million dollars for business acquisitions and inquired about other loan products offering higher leverage.

Beau acknowledges the limit on the SBA 7A loan for business acquisitions but mentions that there are banks they work with that offer programs combining SBA 7A with a conventional loan. This allows for a higher financing amount, typically up to seven and a half million dollars. These loans can cover up to 90 percent of the total product cost, meaning that for the nine-million dollar acquisition, approximately 85 percent of the total product cost could be financed. By utilizing the 5 million dollar SBA loan and a conventional loan of around 2.5 million dollars, a strong borrower and business could potentially secure financing for the acquisition.

Beau emphasizes that these loans for solid businesses and borrowers are commonly approved, particularly for acquisitions under 10 or 11 million dollars. In cases where the acquisitions are even more significant, he mentions the possibility of incorporating a larger seller carryback and utilizing a combination of SBA and conventional loans to secure loan proceeds totaling seven to nine million dollars.

It is best to approach the right bank with an appetite for these deals, mentioning that they have partnerships with banks that handle more significant acquisitions.

If you'd like to ask me a question about real estate, do it here -- https://investorfinancingpodcast.com/ask

Timestamps:
(00:47) SBA 7A loan and conventional loan options for business acquisitions
(01:06) How much financing could be obtained for a $9 million acquisition
(01:40) Larger acquisitions and the possibility of a seller carry back, and the importance of finding the right bank for these types of deals

Are you a real estate investor or business owner looking to expand? Book a discovery call with Beau to learn all the ways he can help you - https://investorfinancingpodcast.com/rumble

💥 Thanks for watching 💥
#SBA7a #SBABusinessAcquisition #conventionalloans

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

🎥 The video interviews we do on IFP will help you scale your real estate business and learn how to finance all your projects.

About the Channel: Want to structure your investments in the right and secure way?

Learn great insights and make the right decisions through the Investor Financing Podcast hosted by Beau Eckstein.