SBA Financing for the Purchase of an Existing Business

SBA loans are meant to finance the growth or creation of business, and fall into four broad categories:

- Purchase of Existing Business or Franchise

- Business franchises with a track record of success are good candidates for
  an SBA loan
- Collateralization requirements are typically less stringent than for conventional
  loans, and often a lower down payment is required
- Many businesses could not be sold under any other terms, making SBA
  lending beneficial to both buyer and seller

- Building Real Estate

- For the purchase or upgrade of a business land site or house needed to
  operate an owner-occupied business
- Can also be used for new construction of a business facility, such as a
  professional building, automotive shop, or freestanding location
- Loan terms can range from 15 to 25 years - for businesses with a successful
  history, the SBA can offer the longest business real estate terms available

- Fixed Assets

- For the purchase and use of capitalized assets (typically heavy machinery
  and specialized equipment) that can be used as collateral for the loan- Loan terms can range from 7 to 10 years

- Working Capital

- For needs like managing day-to-day cash flow, purchasing assets with
  short-term depreciation - computers, office equipment, or inventory loading- Loan terms can range from 5 to 7 years.