Sba Loan To Buy A Business (2025)

The is the primary government-backed program used to purchase an existing business or franchise . The Small Business Administration (SBA) does not lend the money directly; instead, it guarantees a portion of the loan (up to 75-85%) for approved lenders, which reduces their risk and allows for more favorable terms like lower down payments. Key Loan Terms for Acquisitions Maximum Loan Amount : Up to $5 million .

: Generally up to 10 years for business acquisitions (up to 25 years if real estate is included).

: Variable rates tied to the Prime rate plus a negotiated margin, subject to SBA-mandated caps. Core Eligibility Requirements sba loan to buy a business

: Typically as little as 10% of the total project cost.

: Buyers typically need a 660+ credit score (many lenders prefer 700+) and a solid personal financial history. The is the primary government-backed program used to

: The business must be "small" by SBA size standards and operate for profit in the U.S..

: The business must demonstrate enough historical profit to cover the new debt, often measured by a Debt Service Coverage Ratio (DSCR) of 1.15 or higher . : Generally up to 10 years for business

To qualify, both the buyer and the target business must meet certain standards: