Financing Your Business Purchase

FOR BUYERS

Financing Your Business Purchase

Most buyers do not pay cash. Here are the ways buyers in Tennessee and the surrounding states fund a purchase, explained in plain English.

SBA 7(a) Loans

The most common way to buy a small business. The SBA guarantees part of a bank loan, which lets lenders offer longer terms and smaller down payments.

  • Loans up to $5 million (SBA.gov).
  • For a full purchase, plan on bringing at least 10% of the price.
  • A seller note can cover up to half of that 10% if the seller agrees to “full standby,” meaning no payments while the SBA loan is outstanding.
  • Terms are often up to 10 years for a business, and longer when real estate is included.

Conventional Bank and Credit Union Loans

Buyers with strong collateral or an existing banking relationship sometimes use a traditional loan. Expect a larger down payment and shorter terms than an SBA loan, but often a faster approval.

Seller Financing

The seller is paid part of the price over time, with interest. Nationally, 90% of buyers expect some seller financing, but only 29% of owners plan to offer it (BizBuySell Insight Report, Q2 2026). Several of our listings include seller financing, and it often helps an SBA loan get approved.

Using Retirement Funds

A Rollover for Business Startups (ROBS) lets you invest funds from a 401(k) or IRA in a business without the usual early withdrawal taxes. It requires setting up a C corporation and a new retirement plan, and the IRS watches these closely. Work with an experienced provider and your CPA before choosing this route.

Partners, Investors and Home Equity

Some buyers combine sources: a partner or investor, family funds, or a home equity line. Your attorney and CPA can help you structure these safely.

What Lenders Will Ask For

  • Two to three years of personal tax returns
  • A personal financial statement
  • Your resume and relevant experience
  • Your credit report
  • Proof of your down payment funds
  • The business’s tax returns and financials (we provide these after you sign an NDA)
  • A short business plan for your first year
  • The purchase agreement or letter of intent

Every listing we represent starts with cash flow rebuilt from the seller’s filed tax returns, which is exactly what lenders review.

Ready to look at businesses you can finance?

Browse Businesses for SaleAsk Us About Financing

Call Arlene at (423) 534-9890. Complimentary, confidential and no obligation.

Loan rules change. This page is general information, not lending, legal or tax advice. Sources: SBA.gov; BizBuySell Insight Report, Q2 2026.