Glossary · The loan itself
Business acquisition loan
In short
Any loan used to buy an existing business. The SBA 7(a) is the most common kind for deals under $5M because it allows 10% down against cash flow.
What it means in a deal
A business acquisition loan packages the purchase price, fees, and often some working capital into a single financing instrument. The SBA 7(a) dominates deals under $5M because conventional lenders rarely finance goodwill-heavy businesses — the SBA program was designed specifically for this. When buyers say they're 'getting SBA financing,' they almost always mean a 7(a) business acquisition loan with a ten-year term and variable rate.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Business acquisition loan
- Is a separate business valuation required for an SBA 7(a) acquisition loan?
- How does the SBA define 'goodwill' in a business acquisition for loan purposes?
- Can an SBA 7(a) loan finance inventory immediately after a business acquisition?
- Do I need a business plan for an SBA 7(a) loan application for a business acquisition?
- What is the fastest a typical SBA 7(a) business acquisition loan can close?
- Can an SBA 7(a) loan cover closing costs associated with a business acquisition?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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