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Windsor Advantage Can Show You How To Buy An Existing Business Using The SBA 7(a) Loan Program

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CHARLESTON, S.C., Feb. 27, 2020 /PRNewswire/ -- Building a business from scratch is a journey that many aspiring entrepreneurs are not prepared to face.  Start-up costs and go-to-market uncertainties are some of the reasons an estimated 2.5 million of the 30.2 million small-businesses in the U.S. change hands in some way, shape or form each year.  Not only does this option allow potential small-business owners to evaluate operating history and financial performance, but it also allows these individuals to bypass time spent on the administrative burdens of getting up and running.

Windsor Advantage logo (PRNewsFoto/Windsor Advantage, LLC)

To learn more about SBA 7(a) loan programs, visit our blog at https://www.windsoradvantage.com/news.

WHY USE THE SBA 7(A) LOAN PROGRAM TO BUY A BUSINESS?
While there are many benefits to purchasing an existing business, it can be a costly venture.  Aside from independently wealthy or privately-backed individuals, those seeking business ownership will need to research available financing options once the purchase price has been determined.  The most popular way to buy an existing business, including buying out a partner or opening a franchise, is through the SBA 7(a) Loan Program.  The program partially guarantees loans made by direct lenders and aims to promote economic growth by encouraging lenders to partner with small-businesses that may be struggling to secure financing on reasonable terms.  Some primary benefits include long repayment terms, single digit interest rates and little to no collateral requirements.  Starting an application has its complexities, so make sure to do your research on the documentation required well in advance.

WHAT ARE SBA PROGRAM REQUIREMENTS FOR BUYING A BUSINESS?
From a high-level, the business in question must be considered "small" by SBA standards. The business must be for-profit, based in the U.S., not engaged in prohibited activities and have owner equity invested.  In the case of brand-new ownership transactions, the required equity injection must be at least 10% of the total project cost, while in partner buyout scenarios, the required equity injection must be at least 10% of the total purchase price.  Eligible options for equity injection may include cash savings, cash from personal loans, seller notes (up to half of the required equity injection amount and must be on full standby for the life of the loan), gifts from family or friends, certain assets and retirement plan withdrawals (taxes may need to be considered).  In addition, the SBA Franchise Directory offers a specified list of all franchises and other brands in the U.S. that are eligible to receive SBA loans.

Starting your entrepreneurial career using the SBA 7(a) Loan Program to buy an existing business involves less uncertainty and can be very rewarding, if done the right way.  To see if you qualify for business acquisition financing, contact Windsor Advantage at (866) 823-5550 to speak with one of our experts today who will ensure placement with an approved SBA Lender.

About Windsor Advantage, LLC

Windsor Advantage is a Lender Service Provider that provides banks, credit unions and CDFIs with a comprehensive outsourced SBA 7(a) and USDA lending platform.

Since 2010, Windsor has processed more than $2.2 billion in government guaranteed loans and currently services a portfolio in excess of $1.3 billion (as January 31, 2019) for over 85 lenders nationwide.

With over 150 years of collective SBA experience, cutting-edge technology, rigid controls and consistent processes, Windsor Advantage is uniquely qualified to assist any sized lender with implementing a thoughtful and profitable government guaranteed lending initiative.

Windsor Advantage has a team of 26 professionals with offices in Chicago, Illinois; Indianapolis, Indiana; and Charleston, South Carolina.

Contact: James Tibert, 843-640-5321

 

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SOURCE Windsor Advantage, LLC

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