The normal train of thought for most people is that the buyer must qualify for financing. While that is true, the business must also qualify and meet cash flow requirements set by the lenders. Banks will not lend money to the buyer, regardless of how strong their credit history, if the deal has to cash flow.

So why would a seller try and prequalify their practice for financing? The main reason is to ensure a speedy transaction. Most of the deals we have helped financed recently have been SBA loans. SBA loans are a very good financing alternative for the buyer, however there is some paperwork that is involved before getting the all important commitment letter. The seller will need to provide the lender with historical tax returns and financial statements as well as a most recent profit and loss statement. Having your firm’s financials in order and current will help save time for all parties involved. The banks can only work on the transaction once they have all the proper paperwork.

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