General economic conditions, the appetite of lenders and the size of the transaction largely dictate options available to the buyer community.

VR has developed many strategic alliances with lenders to facilitate transactions under $2.5 million.  These particular alliances account for a majority of transactions within the realm of privately held business sales and therefore are attractive to SBA lenders.  With a guarantee offered by the US government of 75% of the loan (not to exceed $1.5mm) the SBA offers an extremely attractive financing alternative for buyers seeking a business valued at $2.5 million or less.

The SBA offers another program that will finance real estate and/or equipment in addition to the business component.  VR’s office in Austin, Texas can provide details to interested parties.

Transactions exceeding the range described above are normally those associated with middle market transactions and invite various lending possibilities that transcend a wide spectrum of loan structures.  Organic funds may finance a transaction if the acquiring firm has the financial resources, but funds will most likely be secured from a senior lender (i.e., banks) to finance an acquisition.  Funds/capital may also be arranged through other vehicles such as subordinate and/or mezzanine lenders.  These lenders seek a higher return since they assume a role behind that of the primary lender.