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HBR Guide to Buying a Small Business
book

HBR Guide to Buying a Small Business

by Richard S. Ruback, Royce Yudkoff
January 2017
Beginner content levelBeginner
320 pages
5h 22m
English
Harvard Business Review Press
Audiobook available
Content preview from HBR Guide to Buying a Small Business

CHAPTER 18

Raising Debt

Buyers typically pay for their acquisition of a smaller firm by borrowing about two-thirds of the purchase price. As you learned earlier, some of that debt may be in the form of seller financing that you specified in your LOI. The remainder of the debt will come from a bank, in the form of either a commercial loan or a loan backed by the Small Business Administration (in the United States; other countries have different programs to foster lending to smaller firms), or from a nonbank lender.

As described in chapter 15, “Deal Terms,” you will be looking primarily for a senior loan, which stands first in line to be paid, ahead of other creditors and equity holders. Senior loans are typically limited to 30% to 50% of the total ...

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Publisher Resources

ISBN: 9781633692510