Updated
A business acquisition financing package should explain what is being bought, how it will be paid for and how the company will repay debt after the ownership change. The lender needs a coherent transaction, not simply a large folder of documents. Organize the purchase, borrower and operating evidence around those three questions.
Download the printable two-page acquisition checklist (PDF). It includes a document-status table and a blank sources-and-uses worksheet. Use current figures and attach additional schedules where the transaction requires them.
Jaken Finance Group arranges conventional bank and SBA reviews through a bank relationship. Qualified bank-arranged requests can reach $12 million, with SBA limits and individual eligibility reviewed separately. Read the bank financing overview or submit an initial business inquiry.
1. Write a one-page transaction summary
Identify the business, industry, location, buyer and seller. Describe whether you are purchasing assets, ownership interests or a partner’s share. List what is included: goodwill, equipment, inventory, receivables, real estate and any liabilities assumed.
State the proposed price, requested bank amount, seller financing and buyer contribution. Include the expected closing date and the status of the agreement. Explain any deadline, unresolved consent or property issue that could affect financing.
The summary should make the next document obvious. If real estate is included, attach a separate price and property description. If the business leases its premises, identify the lease term and any assignment question.
2. Document the buyer and available contribution
Prepare the buyer’s resume and relevant operating experience, ownership structure and entity information. Explain who will manage the company and who will replace the seller’s duties. A financial buyer and an experienced owner-operator can present different execution questions.
Document funds available for the transaction and funds already committed elsewhere. Identify the source of the contribution and any proposed borrowed funds. The lender determines what it accepts as equity; a balance displayed in an account does not settle that question.
Also plan cash remaining after closing. Do not use the same dollars as both the purchase contribution and an additional reserve unless the agreed budget actually permits that treatment.
3. Reconcile the historical financial records
Provide the financial statements, tax returns and supporting schedules requested by underwriting. Add current interim results, prior comparable periods and an explanation of meaningful changes. Keep reporting periods consistent.
Reconcile significant differences between reported revenue, receipts, bank activity and tax reporting with your accountant. Separate documented one-time items from recurring operating costs. Include existing debt payments and obligations that will remain after closing.
Prepare a list of proposed adjustments to earnings, with evidence for each. Compensation for work that still needs to be performed, recurring software and ordinary maintenance are not automatically available cash merely because the seller proposes adding them back.
4. Add industry-specific operating evidence
| Business type | Useful operating schedules |
|---|---|
| HVAC, plumbing or electrical contractor | Service agreements, backlog, work in progress, receivables, payroll and fleet condition |
| Dental or other practice | Aggregated production and collections, staffing, equipment and provider-transition plan |
| Professional services | Recurring and project revenue, retention, concentration, owner duties and contract questions |
| RV park or self-storage | Collections, occupancy, operating expenses, capital needs and property records |
| Assisted living or care operation | Aggregate census and collections, staffing, operating history and licensing or transfer questions |
| Car wash | Sales and payment records, membership information, equipment condition and operating costs |
These schedules help explain how the business works. They do not replace the bank’s final requirements or establish approval. Use the contractor, dental and professional-services guides for detailed illustrations.
5. Prepare valuation and purchase-document support
Provide the proposed agreement and allocation of price among assets and uses. Identify any third-party valuation already obtained, its date, scope and recipient. Ask whether the lender must order or approve its own report before paying for another one.
A business valuation, a real estate appraisal and a purchase-price allocation serve different purposes. A supported total purchase price does not establish how much debt a lender will advance. Repayment capacity and other program limits can produce a lower result.
For an asset acquisition, the IRS Form 8594 overview is a primary reference on the reporting form. Ask your advisors to determine the applicable reporting and allocation. Do not copy an allocation from another transaction solely to make a budget balance.
6. Build the sources-and-uses worksheet
List each expenditure once. Typical project categories to review include purchase price, closing and professional costs, report fees, immediate improvements and starting working capital. The actual eligible uses depend on the selected program.
| Hypothetical uses | Amount |
|---|---|
| Business purchase | $2,500,000 |
| Closing and report costs | $100,000 |
| Initial working capital | $200,000 |
| Immediate equipment and improvements | $200,000 |
| Total uses | $3,000,000 |
In this separate invented illustration, a $2,000,000 bank loan, $400,000 seller note and $600,000 buyer contribution provide $3,000,000 of sources. These are planning assumptions, not quoted terms, required equity or permission for seller debt.
If the buyer has $750,000 available before contributing $600,000, $150,000 remains afterward. The $200,000 working-capital use is already in the financed project budget; it should not be added a second time as another identical expense. Separate any additional required reserve and verify whether it overlaps with working capital.
7. Show all seller and continuing obligations
Provide proposed seller-note amount, interest basis, payment schedule, lien position and maturity. If a note is on standby or payments depend on performance, state the actual terms and ask the lender how it treats them.
An earnout, seller consulting agreement, equipment lease and fixed seller note can create different cash obligations. Include each one in the post-closing operating budget. A small monthly payment can also conceal a large balloon later.
Do not assume that seller financing satisfies a program’s buyer-equity requirement. Obtain approval of the proposed structure and documents before relying on that source at closing.
8. Confirm which program is being evaluated
The SBA 7(a) overview describes eligible uses and a separate maximum loan amount. Conventional bank financing follows the bank’s credit requirements. The bank-arranged channel’s ceiling does not enlarge an SBA limit.
Ask which program, borrower and collateral are being proposed. For a building purchase, separate operating-business uses from fixed-asset uses. The SBA 504 overview identifies uses it excludes, including working capital and investment in rental real estate.
Use the conventional versus SBA acquisition comparison when the amount, timing or transaction structure requires a broader review. A bridge is a separate short-term obligation with a repayment plan; it is not an automatic future SBA approval.
9. Resolve the written terms and closing conditions
Request a proposal identifying amount, use, contribution, fees, interest basis, repayment schedule, maturity, collateral, guarantees and reporting obligations. Identify which reports, consents, liens or ownership questions remain open.
Compare the lender’s proposed funding with the latest sources-and-uses schedule. Update payoff dates and any deposit credits. Assign a person and due date to each outstanding item rather than assuming the lender has every document already.
The checklist is complete when the numbers reconcile and unresolved questions are visible. Approval, disbursement and closing timing still require the lender’s review and satisfied conditions.
Submit the summary, then follow the document process
Request a business financing review with the industry, location, amount, purpose and business history. Keep sensitive customer information out of the initial inquiry. Call (833) 264-7776 if the transaction has a deadline or several financing uses. Conventional bank and SBA options are arranged through a bank relationship. Program, industry, use, geography and borrower eligibility are reviewed for each request. SBA program limits apply separately.