There are so many new creative avenues to get funding. Today it's cheaper to start a business than ever before.
Ray Pearson, Entrepreneur 


SBA Loans ​ 
Prime borrowers looking for the longest repayment terms and lowest interest rates. 
Rollover for Business Startups (ROBS)
​If you have $50K+ in a retirement account you can use it to buy a business, or as a down payment for an SBA loan.

Seller Financing
The seller can finance part or all of your purchase. This works well with other financing sources, like ROBS or SBA loans.

HELOC & HEL
When you have 20%+ equity in your home, and are okay using your personal home as collateral for your business.
Family & Friends Loan
If you have wealthy friends or family members who believe in your business and want to invest.

Obtaining Funding To Buy a Business

Written By Ray Pearson 10/1/2017
Buying a business is a big undertaking. Getting a loan to buy a business can seem just as tough. Banks set high standards that both you and the business you’re buying, have to meet before being approved. We will show you how to get a loan to buy a business and where to find business acquisition financing. There are so many new creative avenues to get funding. Today it's cheaper to start a new business than ever before.
Most people haven’t heard of a ROBS but it may help you fund your business acquisition. A ROBS lets you use retirement funds without paying early withdrawal penalties or taxes to buy a business. If you have $50k+ in retirement savings, schedule a consultation with financial advisor. If you don’t have one Venture Business Brokers has dozens in your area or contact The National Association Of Personal Financial Advisors.
  
Need Funding To Buy Your Business-We Can Help
Here are the five most common loans to buy a business:
1. SBA Loans for Buying a Business
If you’ll be needing a loan to purchase a business, we recommend that you begin your search for financing with SBA loans.
SBA loans are generally the least expensive sources of capital available to a small business owner. Additionally, it’s typically easier to get approved for SBA financing to buy an existing business compared to getting approved to fund a startup. This is because the lender is able to better judge the existing business’s potential to repay a loan by looking at its track record rather than pinning their hopes on a startup’s projections alone.
Most lenders will first consider you for an SBA loan because these loans are partially guaranteed by the U.S. Small Business Administration. SBA loans have the most competitive interest rates and longest repayment terms of just about any financing option available. The downside of working with an SBA lender is that it can be difficult to qualify, and even if you do, it can take a long time to get financing (45-120+ days). Here is a list of the 100 Most Active SBA Lenders
2. Rollover for Business Startups (ROBS)
In most cases, buying a business is time sensitive. If your acquisition is delayed, the seller may simply decide to go with another buyer, and you’ll lose out on the opportunity. This is why so many people who could qualify for a bank loan to buy a business (if they wanted to take the time and jump through all the hoops) choose not to.
If they have sufficient money saved in a retirement account, they opt for a ROBS instead. If you have at least $50K in a 401(k), IRA, 403(b), or other eligible retirement account, a ROBS may be a good option for you.
A ROBS makes your retirement savings available for the purchase of a business without incurring the taxes and penalties that come with an early withdrawal. Plus, the funds are generally available in 2 – 3 weeks. That’s more than 4x as fast as a typical bank loan.
3. Seller Financing
Seller financing is when the owner you’re buying your business from agrees to finance part or all of the purchase price. This can help borrowers with a less than prime credit profile gain access to an amount of affordable financing they may be unable to get otherwise. It also can speed up the sales process, and help give you an even larger amount of confidence in the business since the current owner is willing to have something invested in your success.
Typically, sellers open to offering seller financing will finance around 15-60% of the purchase price of the business they’re selling. The rates on seller financing are usually similar to prevailing market rates (an APR of 6-10%). These details will vary from deal to deal and are part of early negotiations, which should begin early in the sales process.
There are no specific qualifications for seller financing, because each seller will have different requirements. Many sellers will check your credit, and will want to see a respectable credit score, but you don’t have to be a prime borrower. If your score is 600+ then you’ll be acceptable to many sellers offering financing ( check your score for free ).
4. Home Equity Line of Credit (HELOC or HEL)
A home equity line of credit (HELOC) and home equity loans (HEL) might be a good option if you’re willing to put your personal home at risk for the business you’re buying. According to a study by the NFIB, a small business activist, around 25% of small business owners have used a home equity line to at least partially fund their business.
To use a HELOC or HEL you’ll need a minimum of 20-30% equity in your home, and a 620+ credit score. These loans can be less expensive than even traditional bank or SBA loans, and the only collateral used is the home you’re using to borrow against. This is a very flexible form of financing where you can use the funds for anything you want, including buying a business.
You can learn more about HELOC’s or HEL from the Best HELOC Lenders .
5. Buy a Business With Friends & Family Financing
Borrowing from friends and family is very common for new businesses. In fact, according to National Venture Capital Association, around 24% of all startups get financing from either family members or close friends.
Buying a business that is currently in operation will likely cost more than you can raise from the people you’re closest to, but it could be an excellent resource to get a piece of the capital stack you need.
If you’re going to borrow money from friends and family, we recommend that you make it an official business transaction. The transaction should be in writing, and you should make payments on the money you borrow like you would with any other loan.
Bottom Line: How to Get a Loan to Buy a Business
The question of how to get a loan to buy a business has a number of answers. In the end, financing a business acquisition requires careful planning and analysis of all your options. SBA loans are a good place to start but expect a lengthy process of document collection and lender review that can last 120 days or more.
If you don’t meet the requirements of a bank loan or SBA loan, or if you just don’t have time for the lengthy underwriting process, you can consider using retirement funds in a ROBS, negotiating seller financing, or tapping the equity in your home. The right one will depend on your situation, but a ROBS can give you the flexibility and funds you need within a few weeks.