Buying out a business partner is a huge step for many small business owners. Whether you’re interested in a partial partner buyout or obtaining 100% ownership of the business, it’s a step that might require long-term financing. While there are many options available to small business owners, an SBA partner buyout loan could be a great fit for you.
If you’re considering buying out your business partner, here are a few things to think about:
- Create a plan with your business partner
There are many reasons why a partner buyout is necessary, like if your business partner is ready to retire or has other goals they’d like to pursue. Regardless of the reason, it’s important to remain on good terms with your business partner and work together to create an amiable exit strategy. If you didn’t establish a partnership agreement at the beginning of your relationship, now would be the time to do so.
- Consult your attorney and accountant
When you’re ready to begin the partner buyout process, you should consult with an acquisitions attorney and your accountant. Your business attorney will help you understand the legal implications of the change in ownership and will review your partnership agreement. At the same time, your accountant will review all financial records in order to give a full valuation of the business. They will also ensure that you are compliant with any tax rules related to the buyout.
- Consider your long-term financing needs
Now that you’ve developed a plan and sorted out the details, it’s time to think about how you will finance the buyout. Depending on the value of the business and how large your partner’s share is, long-term financing may be needed. There are many loans available for partner buyouts, including conventional and SBA loans.
SBA partner buyout loans are a popular option for many small business owners because they often come with a set of benefits that aren’t found through conventional lending. Some of these benefits include lower down payments, longer loan terms, and interest rate flexibility. This will allow you to keep cash flow in your business in order to fund continuing operations and future growth. With our SBA loan products, we can often finance up to 100% of your partner buyout and even finance partial buyouts.
- Find a lending partner
When you’re ready to finance the buyout, it’s important to choose an SBA lender that understands your business and what you’re trying to achieve. At FNB Small Business Finance, our Business Development Officers will serve as your advocate through the entire SBA loan process. We’re also a Preferred Lender with the SBA, meaning that we can streamline the loan process so you can have access to the capital you need as quickly as possible.
If you’re in need of an SBA loan for your partner buyout, reach out to our team today!