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Most business acquisition loans are term loans. You receive a lump sum of cash to buy a business and pay it back, with interest, over a defined period. The amount of funding you qualify for, interest rates, and repayment terms vary based on the borrower's creditworthiness and the type of lender.
Lenders also typically rely on a business valuation which is a professional evaluation of the the value of the company you want to buy along with other factors to figure out how much they will lend you.
Lenders will not fund an entire business acquisition. They will only loan you a percentage of the purchase price. You will have to put up a part of the cost of the business as a down payment. Down payments on business acquisition loans typically range from 10 to 30 percent depending on the type of financing, lender, the company you’re buying, and your credit score.
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