To get a loan to buy a business, first add up the full cost: the price, working capital and fees. Then get the seller's tax returns, profit and loss statements and bank statements, plan your own cash down payment, ask whether the seller will carry a note, and compare an SBA 7(a) loan with a bank or credit union loan. Lenders look at the business's past cash flow, not projections.
Last updated: October 2026
The short version
- Add up the full cost: price, working capital and fees.
- Get the seller's records and check that the price fits the cash flow.
- Plan your own cash down payment and ask about a seller note.
- Compare an SBA 7(a) loan with a bank, credit union or CDFI loan.
What SBA says a 7(a) loan can pay for
The SBA 7(a) loans page lists the uses a 7(a) loan can cover. One of them reads:
"Changes of ownership (complete or partial)"
In plain words, buying a business is one of the listed uses. You apply through an SBA-approved lender, not SBA itself. The Lender Match tool on SBA.gov can help you find lenders that make these loans.
First: Add up the full cost
The price is only part of what you need. Count:
- The purchase price.
- Working capital to run the business for the first months.
- Closing costs and loan fees.
- Any equipment, lease or license changes that come with the sale.
Next: Get the seller's records and check the price
Ask the seller for:
- Business tax returns.
- Profit and loss statements.
- A balance sheet.
- Business bank statements.
- A list of debts and liens.
If the price is higher than the business is worth, the lender may not cover the difference. See the SBA 7(a) business valuation gap. Lenders judge the deal on past cash flow, as explained in historical cash flow, not projections. For your own side of the file, see what documents you need for a business loan.
Then: Plan your down payment and any seller note
Lenders usually want some of your own cash in the deal, and they want to see where it came from. Read the equity injection paper trail. A seller note, where the seller lets you pay part of the price over time, can sometimes help; see equity injection and the seller note.
Before you apply: your side of the file
Lenders want to see the deal and you, not just the seller's numbers. Have these ready:
- A letter of intent or signed purchase agreement: the price, what is included, and how the deal is paid for, including any seller note.
- A short business plan: how you will run the business, why you are the right buyer, and how the business will keep paying the loan.
- Your own records: personal tax returns, a personal financial statement, and proof of where your down payment cash comes from.
- Your experience: a resume that shows you know this industry or have managed a business before.
For the full list, see what documents you need for a business loan.
Finally: Compare the loan types
| Option | Good points | Trade-offs |
|---|---|---|
| SBA 7(a) loan | Longer terms | Slower, more paperwork |
| Bank or credit union loan | Often lowest cost | Hardest to get |
| Seller financing | Flexible | Depends on the seller |
| CDFI lender | Serves borrowers banks may turn down | Smaller loans, varies by lender |
More on CDFI business loans.
Short-term online loans and merchant cash advances are a poor fit for buying a business, because the payments come out of the cash flow you just bought. Read is a merchant cash advance a good idea.
How to compare loan offers
When you have more than one offer, put them side by side and get each of these in writing:
- Down payment: how much of your own cash the lender wants in the deal.
- Collateral: what the loan is secured by, and whether your home or other personal assets are included.
- Personal guarantee: most business loans ask owners to sign one, which makes you personally responsible if the business cannot pay.
- Total cost: the rate, all fees and the full amount you will pay back.
- Term and payment: how long you will be paying and the monthly payment, checked against the business's past cash flow.
Special cases
- Buying out a partner: see the SBA owner buyout rule.
- Buying a franchise: see the SBA franchise directory check.
- Short of collateral: see collateral shortfall and home equity.
- Not sure you qualify: see how to qualify for an SBA loan.
Watch for broker fees and calls
Once you shop for acquisition money, broker calls often start. Any agent fee on an SBA loan must be disclosed; see SBA agent fee disclosure. Also read how to get an SBA 7(a) loan without getting hooked by brokers and how to stop MCA broker calls.
Every other way to fund your business
Buying a business is one path, and a loan is one way to pay for it. See every way to fund your business.
For free help, try the FDIC's Money Smart for Small Business.
Sources
Checked on SBA.gov and FDIC.gov in October 2026.
- SBA, 7(a) loans
- FDIC, Money Smart for Small Business
Last updated: October 2026