What is a business acquisition loan?

Acquisition loans are specifically used to acquire another business or its assets.

• Acquisition loans are used to help business owners acquire another business’s assets or even entire companies.
• Acquisition loans come in several varieties, from conventional term loans to revenue-based loans, and lines of credit.
• Generally, acquisition loans use the acquired assets as collateral to secure the loan.
• This article is for business owners interested in using an acquisition loan to expand their business and acquire new assets.

Acquisition loans are loans that businesses use to acquire other businesses or strategic assets, such as equipment. These are purchases that can’t typically be made using the company’s normal cash flow, so businesses use loans to make the purchase without having to raise capital. Using an acquisition loan, your company can make large strategic purchases with as little as 15% down, then pay off the balance over time.

Acquisition loans are extremely common for companies that are growing quickly as well as those actively engaged in mergers and acquisitions. They’re also sometimes used by companies that utilize large or expensive equipment, like construction companies, data storage providers, or large contractors. Acquisition loans help these businesses acquire crucial assets (including other companies) that can help them grow their bottom lines.