Small Business Administration Financing

Thanks to the US Small Business Administration Loan Guarantee Program, favorable financing terms are available to business buyers.

Similar to the terms of typical seller financing, SBA loans have long amortization periods (ten years), and up to 90 percent financing (more than usually available with the seller-financed sale).

SBA loans are not, however, a given. The buyer seeking the loan must prove stability of the business and must also be prepared to offer business and personal collateral - machinery, equipment, or real estate. In addition, there must be evidence of a healthy cash flow in order to insure that loan payments can be made.

Over the years, the SBA has become more in tune with small business financing. It now has a program for loans under $100,000 that requires only a minimum of paperwork and information.