BHG Financial – Ready to Be the Boss? Use an Acquisition Loan to Get Started

Working long hours for an employer can take its toll. After years or even decades of commuting to an office and contributing to someone else’s vision, the idea of taking control and starting your own business can be very appealing. While there are many factors to consider before pursuing entrepreneurship, one of the most important is how to finance a business venture.

A business acquisition loan is one financial tool that can help make someone’s dream of business ownership a reality. Here’s what to know about business acquisition loans and how they can help accelerate the path to becoming one’s own boss.

What is a business acquisition loan?

A business acquisition loan is a commercial loan offered by banks, credit unions, and online lenders that’s designed to help someone buy an existing business. These loans can help someone quickly move into entrepreneurship by offering them the chance to own a business that’s already established.

To qualify for an acquisition loan, applicants will need to provide information related to their personal and business income and credit scores. Even if someone has no experience running a business, first-time business owners may be eligible based on their personal financial history.

If someone qualifies, they’ll receive a lump sum fixed-interest loan with a set repayment schedule. Since acquisition loans tend to be a quick financing option, borrowers may receive their money within a few business days.

3 Ways to leverage a business acquisition loan

There are many uses for a business acquisition loan; here are three of the most popular.

Purchase an existing business.

Buying a business outright is one well-known use of a business acquisition loan. Prospective buyers can work alongside a business broker to identify companies that might be well-suited for their unique leadership and talents. A significant benefit of buying an existing business is that it often has a track record of financial success and has an existing client base. Whether it’s a gas station or retail store, a buyer can look into the books to understand monthly cash flow and other key business metrics before finalizing the sale.

Buy into a business partnership.

Certain professions, like doctors, lawyers, and accountants, tend to structure businesses with multiple owners. Depending on the firm and area, these partnership spots may require a few hundred thousand dollars to buy into. Since some professionals are saddled with student loan debt, they may not have the excess funds required to pay the buy-in outright. That’s where a business acquisition loan can help. With projected income in mind, it can be fairly straightforward for a buyer to understand how quickly they can pay back the loan and create a repayment plan.

Open a business franchise.

A franchise is a business model where someone can operate an independent establishment using the brand, name, and imagery of a larger brand. In return, they pay a fee to the franchisor. This is a common operating model for chain restaurants, fitness facilities, and hardware stores.

Once someone pays the franchise fees, they’ll also pay ongoing royalty fees to the franchisor, which is typically a percentage of overall revenue. However, they get name recognition and support from the parent franchise in exchange, which can lead to more sales and reach, creating a larger financial benefit.

The bottom line

Buying an existing business is one way to make entrepreneurship feel less scary. With the stability of a track record of business success or support from a franchisor, someone may be able to take the leap to be their own boss with far more confidence. Before jumping in, it might make sense to contact a financial professional who can work alongside someone to assess their current financial situation and ensure taking on debt to buy into a business is a smart financial move.

Advisory Disclaimer

This content is sponsored by BHG Financial and is provided solely for general informational purposes. It is not intended as a substitute for financial, legal, or business advice specific to your circumstances. We recommend that business owners and individuals consult with their own advisors to evaluate how the information applies to their situation. To find out more about BHG’ financing solutions, including terms, availability, and associated costs, please visit the BHG Financial website or speak with a BHG Financial representative.

Media Contact Information

Name: Sonakshi Murze
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