This is the question I get more than any other and my answer is YES, Absolutely Yes!! My answer may surprise you, and some may even want to argue, but if you have been in the lending or business brokerage industry for more than 6 or 7 years I think you will agree.

When I look back to the 1990's and early 2000's when I was asked, "What does it take to get a business acquisition loan?" I would tell them a borrower must be able to CONVINCE the lender of the following:

  • The ability and willingness to pay all of their obligations on time.
  • The specific experience needed to own and run the business.
  • They had enough cash to make a substantial investment into the business.
  • They had some tangible assets to back the loan should things go bad.
  • Today when I am asked "What does it take to get a business acquisition loan?" I tell buyers and brokers exactly what I did 10 and 15 years ago.

The trouble with many individuals today is they are sitting around waiting for things to get back to the way they were in 2007. Unfortunately, the lending of 2007 is gone and most likely gone forever. SBA lending in 05, 06 and 07 was more about lender greed than it was about solid underwriting. We were able to get deals approved with a 1-2 paragraph summary and a laundry list of "add backs". Ten years ago a typical deal write up was 5-10 pages. Today, we are back to that same in depth analysis.

Just as it was in the past, it is critical that the business and the buyer be presented completely and in the "best light" possible to ensure months of hard work do not end in vain. When it comes to business lending, you really only have one chance to make a positive first impression. If the initial package does not convince the underwriter of the deals merit, your chances of ever getting the deal funded plummet.

In conclusion, having arranged funding for over 250 business acquisition loans over the past 20 years, I can honestly answer YES, business lending is back to normal!

This article was contributed by: Steve Colburn, President, Eagle Capital Advisors.