How to finance a business acquisition

NEW YORK – Business experts often say that it costs less to buy an existing business than to build one from the ground up. If you are an entrepreneur looking into purchasing a business, there are a few items to consider when seeking financing for the acquisition that may strengthen your viability as a loan candidate and your ability to tap into a variety of potential financing sources.

Most lenders will want to review your business plan, and you should also determine the economic status and value of the business you're considering buying. Review the financials and consider having your banker and/or trusted financial advisor also review the numbers. Ascertain the value of the business, including any equipment, real estate, inventory and other assets.

To increase your viability as a loan candidate, convey your industry expertise and any management know-how to your potential lender. Lenders look for candidates who exhibit strong potential for success after acquiring the business. Show lenders that the transition period will run smoothly, and consider keeping existing managers on staff to help ensure an easy transition. Seasoned employees can also help you learn the inner workings of the business and help secure extended contracts with existing customers.

Please visit MSNBC to see a list of potential lending sources.