There are many reasons that buyers of businesses are turned down for acquisition loans. Oftentimes the price of the business is too high and the cash flow of the business can’t support servicing of the debt.
Sometimes the assets to be used for collateral are inadequate. But the banks and the SBA look at other criteria, such as the buyer’s credit rating and their qualifications to operate and manage the business.
At the very least, business owners must make sure their company fits all the criteria that banks are looking for in order to find a buyer that will qualify for a loan.
Read about SBA Business Loan Eligibility here.
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