Printed document with rubber stamp and the word pre-approved. Concept of mortgage or loan pre-approval. 3D illustration.

If you feel it’s time to sell your business, you’ve probably already started your exit strategy. This details all the actions needed to sell, and involves all stakeholders, finance, and business operations.

Did you know that preparing your business for the buyer is one of the most important aspects, and that businesses with pre-approved financing attract more buyers?

Let’s start talking about the benefits of having an exit strategy at this point.

5 Key Points of Your Exit Strategy

If the time has come to implement your business exit strategy, you’ll soon see the benefits it can bring you. Here are the 5 highlights:

As part of this exit strategy, we could include one more point that is very much in line with attracting buyers. I am referring to getting pre-approved financing for the acquisition of your business by a buyer.

Using Brokers for a Successful Exit

From our expertise, if you are thinking of selling your business, the best way to go if you want to do it quickly and at a good price is to hire a business broker. At this point, it is important to consider some aspects of the broker:

How Do I Get Pre-Qualified for Business Financing

Even if you want to sell your business on your own or if you are going to work with a broker, there is an important issue to consider. Have you ever heard about businesses for sale with pre-approved financing? Do you want to know how to be pre-qualified for a business loan? Having a lender pre-qualified for your business is a very positive sign for buyers.

There are different players that can help pre-qualify your business. It is important to highlight that not all lenders work with the same rules and requirements, and may also differ depending on the partner you choose. Working with a lender platform provider may be the best option if you want to get a pre-qualified loan for your business and find the best buyer for the transaction.

This pre-qualification process involves an evaluation of your business in order to ensure it is viable for an acquisition loan. If it is, then the lender will offer a pre-qualification term sheet indicating the amount they would be willing to loan and other important details about the financing.

3 Main Reasons to Get a Pre-Qualified Loan for Your Business Sale

If you are still not sure about a pre-qualified loan when preparing for a successful exit, look at these three reasons below:

#1 Faster sale closing

According to surveys, business owners who offer financing to buyers have a 90% chance of closing a transaction in less than 3 months.

#2 Increase pool of buyers

The same as when you work with a broker, getting a pre-qualified financing increases your pool of buyers. That might be one of the reasons why you can get a faster purchase — as many potential buyers offer many possibilities to close the deal in less time.

#3 Better selling conditions

Having a large pool of buyers allows you to get a higher purchase price and better conditions because it results in more competition, you will have increased the number of people that get a deal done through you.

What Will You Need to Get Pre-Qualified?

If you want to obtain pre-approved financing for your business and thus have greater ease when selling, you need to prepare a series of documents experts will use to evaluate whether your business is suitable to be financed. Think that you are doing a very valuable job for the buyer who, once attracted to your business, will be surprised to find that it also has the financing to speed up the acquisition.

As it was mentioned before, not all lenders or banks have the same requirements in order to start with your business’ pre-qualification process. If you want to do that in a simple and quick way, it is crucial to choose the option that best suits your needs.

What will you need to get pre-qualified? Let me show you a simple comparison between banks and other alternative lenders.

A bank is going to ask you for a large list of requirements (cash flow statement, profit & loss statement, business balance sheet, two years of past tax return, business bank account statement,etc….), which means it will take a long time to get your pre-qualified loan.

Working with a specialized lender, on the other hand, allows you to save time and avoid becoming lost among so much required information; just identifying your Amazon storefront or webpage, and providing us with your monthly P&L for the last 24 months, will be enough for qualification.

How Much Can I Prequalify For?

The financial amount depends on different factors like the kind of business, the yearly revenue, profit, and the purchase price, among others. So then, the loan amount depends on each specific case.

Working with a specialized lender such as Boopos, the financial amount oscillates between 50 and 80% of the purchase price. Let’s see an example.

One of our latest transactions deals with an Amazon business from a seller looking for the best opportunity to successfully exit it. This seller considered brokers as a good option for getting his objective: selling his business quickly and finding the perfect buyer for scaling it. Working with the broker, the idea to get a pre-qualified loan for his business appeared.

Once the seller decided to get pre-qualification financing, Boopos evaluated his business and offered him a financial amount of 60% of the purchase price. In less than 48 hours, the seller has a pre-qualified loan for his business sale.

What happened next? In a few weeks, the transaction was done. Several buyers were interested in the business with pre-approved financing and it was not difficult to find the perfect buyer for it.

That’s the reason why pre-approved financing can make it happen easily and quickly. Ready for a Successful Exit?

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