Financing built to buy a business rather than build one — an existing customer base, cash flow, and team, priced against a valuation instead of a construction budget. SBA 7(a) dominates this category for a reason.
$850,000 total purchase price, 10% buyer equity injection, $765,000 SBA 7(a) loan, 10-year term, Prime + 2.75% (illustrative Prime = 6.75% → 9.5% total)
Why this matters: Confirm current Prime at federalreserve.gov/releases/h15/ before relying on any specific payment number — Prime moves and SBA rate caps reset against it.
Illustrative figures only — actual approval, amount, and pricing depend on lender review of the full file.
| Product | FICO | Time in business | Revenue |
|---|---|---|---|
| Business Acquisition Loan | 680+ | N/A — finances buying an existing business | Target business profitable trailing 2-3 years |
Business Acquisition Loan: 10%+ buyer equity injection typical; a seller note on standby may offset part of it.
Business Acquisition Loan
May also be requested: Independent business valuation, Buyer resume / management bio, Seller note terms, Franchise agreement + FDD
Situation: $650,000 to acquire a retiring competitor's customer book and two service trucks.
Typical match: SBA 7(a) acquisition loan with a portion of the purchase price structured as a seller note on standby, counted toward the equity injection.
Speed: Approval in 5 weeks; closed in 68 days from signed LOI.
Situation: $425,000 purchase price for an established two-bay shop with 12 years of financials.
Typical match: SBA 7(a) with a 90-day seller transition period written into the purchase agreement to offset the buyer's first-time-owner status.
Speed: 60 days from application to close at a Preferred Lender.
Situation: $1.4M practice acquisition — patient list, equipment, and leasehold improvements.
Typical match: SBA 7(a) with an independent business valuation (deal exceeded the $250K in-house-valuation threshold) and a real-estate-inclusive structure for the leasehold buildout.
Speed: 75 days from LOI to funded close.
Illustrative scenarios drawn from the lender partner network — not specific customer data.
See your Business Acquisition Loan options — start an application
These industry pages surface Business Acquisition Loan in their typical product mix.
A business acquisition loan finances buying an existing business rather than building one from scratch. The capital deploys against a valuation of the target's customer base, cash flow, and assets — not a construction budget or a startup projection — which changes both the underwriting and the risk profile.
SBA 7(a) dominates this category for a structural reason: the federal guarantee lets banks lend against goodwill and intangible value — the customer relationships and cash flow that make an established business worth buying — in a way most conventional lenders won't underwrite on their own.
Under current SBA lender policy (effective June 1, 2025), if the intangible/goodwill portion of the deal — the amount financed minus the appraised value of real estate and equipment — is $250,000 or less, the lender can value the business in-house. Above $250,000, or when buyer and seller are related parties, the lender must commission an independent business appraisal from a qualified, credentialed appraiser, and the sale price can't exceed that appraised value.
A seller note on full standby (no principal or interest payments) for the life of the SBA loan can count toward a portion of the required equity injection, under conditions specified in SBA policy — a common structure that lets a buyer close a deal with less cash up front while giving the seller ongoing exposure to the business's success. Earn-outs (deferred purchase-price payments tied to post-close performance) are a separate structure some deals use to bridge a valuation gap between buyer and seller.
Lenders underwrite the buyer as much as the deal. Industry or management experience relevant to the target business meaningfully strengthens a file; buyers without it aren't automatically disqualified but often need a negotiated transition period where the seller stays on to train the new owner and reduce operational risk.
Three things matter most before you sign: whether the deal is structured as an asset purchase or a stock purchase (asset purchases are more common in SMB deals and require an IRS-filed allocation of the purchase price across asset classes), whether the target's post-close working capital is adequate to run the business day one, and whether the seller's non-compete and transition-period terms actually protect the customer relationships you're paying for.
SBA policy generally requires a minimum 10% equity injection into the total project cost on change-of-ownership 7(a) loans. Part of that can sometimes be met with a seller note on full standby for the life of the loan — confirm the specific structure with your lender.
Yes. A seller note on full standby (no principal or interest payments during the SBA loan's term) can count toward a portion of the required equity injection under SBA policy — a common structure that reduces the buyer's cash need while keeping the seller invested in a smooth transition.
Not always, but it meaningfully strengthens the file. Buyers without direct experience in the target's industry aren't automatically disqualified, but lenders often want a negotiated transition period where the seller stays on to train the new owner.
An asset purchase buys specific assets and liabilities of the business — the more common structure in SMB acquisitions — and requires an IRS-filed allocation (Form 8594) of the purchase price across asset classes. A stock purchase buys the legal entity itself, including all of its existing liabilities, which is why buyers usually prefer an asset structure unless there's a specific reason to keep the entity intact.
Most SBA 7(a) acquisition loans take 45–90 days from a signed letter of intent to funded close. SBA Preferred Lenders with delegated authority can move faster — often 30–60 days — for a clean file with a straightforward valuation.
Required whenever the intangible/goodwill portion of the deal exceeds $250,000, or when buyer and seller are related parties. Below that threshold, current SBA lender policy allows an in-house valuation.
Yes — buying out a co-owner's equity stake is a common SBA 7(a) use case and is underwritten similarly to a third-party acquisition: the lender values the business, models DSCR on trailing cash flow, and structures the loan against that valuation.
See your Business Acquisition Loan options — start an application
Editorial disclaimer: This page is for educational purposes and is not financial, legal, or tax advice. Rates, fees, qualification requirements, and product availability are illustrative ranges that vary by lender, market conditions, and individual business profile. ClearValue Lending is a funding platform; all financing is subject to lender partner approval and terms. Actual approval, amount, and pricing depend on lender review. ClearValue Lending is compensated by the funding lender on closed transactions.