What most potential borrowers/business buyers who are seeking a SBA loan to purchase a business don't realize is that all lenders take into account approximately 32 different
SBA loan factors when sizing up a deal for potential SBA loan financing.
One of the true "Key Factors" is what do the tax returns look like. I always ask for the past 3 years returns (usually just the top page of the returns) just to get a snap shot at how the business is doing financially. In a majority of the cases the business is not doing what the seller, buyer, or business broker represents. Many of the players to a deal
don't understand the true concept of adjusted net income or sellers discretionary cash, etc., or what the lenders actually accept when it comes to these numbers.
Lenders have their own
"conservative view" of adjusted net income and it's usually lower than that of what sellers and business brokers represent on the business being sold.
That is why it is important to always secure a portion of the tax returns up front or as soon as possible (even if all the important data like social security numbers, contact information etc is blacked out with a marker) so that you can see if the numbers represented "really do add up".
Remember also that all SBA loan lenders also interpret & process this information differently from one another - that is highly important on who should eventually do the financing on the deal and the terms and conditions that will be placed on the loan
This has saved many of my SBA loan clients a lot of time before they take the steps to fill out the required small business loan application forms to buy a business.
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For more Information, Articles, SBA Loan Calculator, Pre-Qualification Info, and more Details on SBA Loan Financing for small & mid-sized business purchases go to: www.BizBuyFinancing.com•
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