We provide lender-ready capital raise packaging and debt or equity placement support for business owners and buyers looking to secure serious term sheets and close funding on a defined timeline.
For business owners and acquirers pursuing private debt or equity, submit your deal for review. We revert within one working day with next steps and either a quote for our services.
For pre-submission discussions, we offer paid consultations. To initiate underwriting and lender outreach, submit the deal.
M&A Acquisition Loans And Deal Funding
Business acquisition financing is not a standard working capital loan. A business acquisition loan must underwrite two things at once: the quality of the cash flows you are buying and the buyer’s ability to operate the company after closing. That is why lenders ask for more than financial statements. They ask for deal structure, purchase agreement terms, sources and uses, and a credible post-close operating plan.
This guide covers the most searched paths to business acquisition funding, including small business acquisition loan options and the SBA business acquisition loan process. It also shows what lenders actually require to approve an SBA loan for business acquisition or a conventional bank business acquisition loan, and how to avoid the common “soft decline” loop where the file never becomes decisionable.
If you want Financely to package the deal and introduce it to lenders, start with Business Acquisition Loans and our workflow at How It Works.
A lender funding an acquisition is funding a transfer of ownership. That sounds obvious, but it changes the credit logic. A lender is asking, “Will the acquired business produce predictable cash flows after the transition, and can those cash flows repay debt while still paying for payroll, suppliers, taxes, and reinvestment?” That is the heart of a business acquisition loan.
You will hear terms like DSCR, add backs, and quality of earnings. DSCR means debt service coverage ratio, which is simply the cash available to pay debt divided by the required debt payments. Lenders love DSCR because it forces reality into the file: if DSCR is thin, a small revenue dip or cost spike can break the borrower. Add backs are expenses the buyer claims are “non-recurring,” but lenders will only accept add backs that are provable and repeatable. Quality of earnings is the discipline of separating durable earnings from one-time noise. In lender language, it is the difference between a cash flow asset and a fragile story.
When buyers search “business acquisition financing” or “business acquisition loan,” what they usually need is not a list of lender names. They need a decision map that explains which product fits their deal. The financing path depends on purchase price, collateral, cash flow stability, borrower experience, and how clean the deal documents are.
This is often the first stop for U.S. lower middle market buyers because SBA underwriting can tolerate smaller companies and allow longer terms. The SBA business acquisition loan route still has real constraints: lender comfort with the industry, a coherent debt service profile, and a buyer who can operate the business. If your file is messy, the SBA path becomes slow because the lender must document everything.
Official reference: review the SBA 7(a) program background at SBA 7(a) Loans.
A conventional bank acquisition loan usually wants stronger financials, cleaner statements, a clearer collateral picture, and a buyer with meaningful experience. Banks like transactions that look repeatable and enforceable. That means clean purchase agreements, defensible cash flows, and a lender-ready package that anticipates committee questions instead of reacting to them.
If collateral and lien structure matters in your transaction, see All-Asset Lien Packages.
Private credit can fund transactions that banks will not, especially when speed matters, collateral is complex, or the buyer needs flexibility. The tradeoff is usually higher pricing and tighter controls. For many buyers, the right question is not “cheapest rate,” it is “will this close on time and stay stable after closing.”
Seller financing can reduce the cash requirement and improve lender comfort because it shows seller confidence and often acts as an economic buffer. An earnout is a performance-based purchase price component that shifts part of the risk back to the seller. These structures can improve bankability, but only when documented cleanly in the purchase agreement and aligned with lender covenants.
Lenders do not approve business acquisition financing because the target is “a good business.” They approve because they can defend the repayment story with evidence. Underwriting is the process of converting a business narrative into quantified, enforceable credit logic.
The lender tests whether revenue is recurring, whether customer concentration is acceptable, and whether margins are stable. If the business relies on one customer, one contract, or one operator, the lender will treat that as a fragility point that must be mitigated.
Lenders ask who is running the company after closing. A buyer with relevant operating experience is easier to underwrite because the transition risk is lower. If the buyer is new to the industry, lenders often want deeper management coverage and stronger reporting controls.
A clean structure reduces disputes. Lenders read the purchase agreement to see price allocation, working capital adjustments, non-competes, transition services, and seller obligations. These clauses matter because they decide whether the “business you underwrote” is the business you actually receive.
Many acquisition loans are primarily cash flow based, but collateral still matters for enforcement and recovery. Lenders will look at liens on assets, the ability to perfect security, and whether there are hidden claims. Collateral is not only a recovery tool, it is also a discipline tool.
An SBA business acquisition loan typically refers to SBA 7(a) lending used to buy an existing operating business. The SBA does not directly lend. A bank or non-bank SBA lender underwrites the borrower and the target, then the SBA provides a guarantee on a portion of the loan, subject to eligibility and program rules. That guarantee is why SBA lenders can sometimes tolerate smaller companies and longer terms.
In practice, an SBA loan for business acquisition is won or lost on documentation and cash flow proof. SBA lenders want tax returns, financial statements, a clear breakdown of the purchase price and sources of funds, and a consistent narrative that matches the numbers. If your projections claim growth, lenders ask what drives it and what happens if it does not happen. This is where DSCR becomes central, because DSCR forces the file to show a buffer, not just a hope.
If you are targeting SBA financing, the safest strategy is to package the deal as if it were being presented to a conservative bank committee. A lender-ready file reduces back-and-forth and accelerates decisioning, even when the SBA program is the product.
Many small business acquisition loan transactions fail because the structure forces the lender to take all the risk on day one. The best structures spread risk in ways that lenders can defend. That does not mean overcomplicating the deal. It means using a few simple tools correctly, documented properly.
| Structure | What It Means | Why Lenders Like It | Common Conditions |
|---|---|---|---|
| Seller note (subordinated) | Seller leaves part of the price in the deal as debt | Shows seller confidence and adds a repayment buffer | Subordination terms, payment restrictions, maturity alignment |
| Partial earnout | Part of purchase price paid only if performance targets hit | Shifts risk of optimistic projections back to seller | Clear definitions, reporting, dispute mechanics |
| Working capital adjustment | Purchase price adjusts based on normalized working capital at close | Reduces post-close liquidity shocks | Precise definitions in the purchase agreement |
| Asset purchase vs stock purchase | Buying assets can isolate liabilities; buying stock can preserve contracts | Controls liability and contract continuity risk | Tax impact, consent requirements, legal diligence |
| Holdback or escrow | Portion of price held back to cover indemnity claims | Reduces warranty and fraud risk | Escrow terms, claim process, release schedule |
Buyers often search “business acquisition lawyer” late in the process, but legal counsel is not a last-minute item. A business acquisition lawyer is part of lender readiness because lenders fund enforceable rights. Your lawyer is the person who makes sure those rights exist in the purchase agreement, the security documents, and any consents required to keep key contracts in place.
Lenders care about legal enforceability because a strong business can become a weak loan if the buyer cannot enforce key clauses. That includes non-competes, transition services, assignment rights, and indemnities. It also includes the lender’s own collateral rights, which must be documented and perfected. A lender that cannot enforce is a lender that will either price the risk harshly or decline the deal.
Business acquisition funding is faster when the lender does not need to guess. A lender-ready package is a structured data room and memo that answers the predictable questions: what is being bought, what cash flows repay the loan, what the buyer will do after closing, and how the deal is controlled if performance is weaker than planned.
Minimum viable package for business acquisition financing: LOI or signed purchase agreement draft, trailing twelve month financials, last three years tax returns where available, customer concentration summary, normalized EBITDA bridge with support, sources and uses, collateral and lien plan, buyer resume and operating plan, and a clear post-close integration plan that is realistic for the size of the business.
Financely runs mandates through a defined workflow. Review Procedure and What We Do to see the scope and process discipline.
Declines usually happen for a small set of reasons. The mistake is treating those reasons as “lender preference” instead of structural gaps that can often be corrected. If you want approval, you remove objections before the lender asks.
Financely operates as a transaction-led capital advisory desk. We do not sell generic “broker calls.” We build the lender-ready deal package, align it to lender underwriting logic, and route it to a lender and private credit network for decisioning. In plain terms, you are paying to convert a messy acquisition file into a decisionable credit submission, then put it in front of capital that actually funds deals.
If you are exploring business acquisition financing, start with Business Acquisition Loans. If you want to run a mandate through our process and receive a quote, use the submission workflow at Submit Your Deal.
Submit your acquisition details to receive a quote for underwriting, lender-ready packaging, and lender introductions. Strong submissions include a signed LOI or draft purchase agreement, financials, and a clear sources and uses.
Submit Your DealThese answers are intentionally detailed because business acquisition loan approvals are usually decided by definitions. When you understand how lenders use the words, you can structure the file the way credit committees read it.
Business acquisition financing is funding used specifically to purchase an existing operating company. The lender is underwriting the target’s historical performance, the deal structure, and the buyer’s ability to operate post-close. A standard business loan is often underwritten against a borrower’s existing operations and history under current ownership. In an acquisition, ownership changes, so lenders focus on transition risk, customer retention, seller dependence, and whether the cash flows you are buying can still support debt service after the deal closes.
An SBA loan for business acquisition usually requires a clean, documentable file: consistent financial statements and tax returns, a defensible normalized earnings view, and a post-close plan that is realistic. SBA lenders still care about DSCR because it measures repayment buffer. They also care about who runs the business after closing and whether the company can operate without the seller. If the seller is the whole business, lenders will ask for a transition services plan and proof that operations can be institutionalized.
At minimum: LOI or purchase agreement draft, trailing twelve month financials, last three years financials and tax returns where available, customer concentration summary, AR and AP aging, sources and uses, buyer resume and management plan, and a projections model that ties to contract reality. Lenders also want clarity on working capital at closing and on any seller financing. If legal enforceability is unclear, the lender will ask for counsel confirmation that key rights and consents will be obtained.
Yes, and not because the lender wants paperwork. A business acquisition lawyer protects the buyer and helps keep the loan enforceable by ensuring purchase agreement terms are clear, liabilities are understood, consents are obtained, and the transition provisions are enforceable. From a lender perspective, legal clarity reduces dispute risk. If the buyer cannot enforce non-competes, indemnities, or key operational rights, the lender assumes more risk and may restrict, reprice, or decline the deal.
We structure the submission the way lenders underwrite. That means packaging the deal into a coherent lender-ready file: clear sources and uses, normalized earnings logic with support, risk narrative linked to mitigants, and a data room that follows credit committee patterns. We then route the mandate to lenders and private credit partners for term sheet decisioning. If a deal is not financeable on realistic terms, you receive written blockers so you can correct the file rather than burn time in endless lender Q&A.
Business acquisition financing is won on evidence: clean deal structure, provable cash flows, defensible DSCR, and a lender-ready package that answers committee questions before they are asked.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
Services are strictly business-to-business. Financely does not provide personal finance, consumer credit, or retail advisory services.
Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
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All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagements may be carried out through Financely Group LLC, a non-deposit-taking, non-banking financial company; Ashford Capital Advisory LLC; or another related entity.
Financely and its affiliates are not registered as securities broker-dealers and do not execute securities transactions or hold client funds or securities. When a mandate involves the purchase or sale of securities and a registered intermediary is required, any orders are introduced to and executed by one or more independent U.S. broker-dealers registered with the SEC and FINRA. Those broker-dealers are solely responsible for trade execution, custody, and related regulatory obligations. Nothing in this material constitutes an offer, solicitation, or recommendation to buy or sell any security or to engage in any specific transaction. Before engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate, you are responsible for confirming that such engagement complies with your own legal, regulatory, tax, and other requirements. In the United States, certain advisory activities may be conducted in reliance on exemptions available under the Investment Advisers Act of 1940, including the “foreign private adviser” exemption where applicable. Our services and regulatory status may vary by jurisdiction and by transaction type.
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