Acquisition Readiness
Score

Most SBA lenders require 10–20% down. For a $500K business, plan for $50K–$100K down plus closing costs and 6 months of operating reserves. Total cash needed is typically 15–25% of purchase price with SBA financing.

Not always, but it helps with lenders and sellers. Strong management experience or a partner with industry expertise can compensate. Service businesses are generally more accessible to first-time buyers without specific industry backgrounds.

SBA 7(a) is the most common tool for business acquisitions — up to $5M, competitive rates, 10-year terms, 10% down in many cases. You work through an SBA-approved lender. Pre-approval typically takes 2–4 weeks; full approval 60–90 days.

LOI to close: 60–120 days. Finding the right business: 6–18 months. Due diligence: 30–60 days. SBA financing adds 60–90 days. All-cash or seller-financed deals can close in 30–45 days from LOI.

Undercapitalization. Buyers stretch to the purchase price but forget working capital, deal costs (legal, accounting, broker fees ~10–12%), transition inventory, and emergency reserves. Plan for 6 months of operating expenses in cash beyond your down payment.