Acquisition & Business Loans

Acquisition loans for a business are critical if purchasing an established company is part of your trajectory towards success

Business Acquisition Loans in Australia

When you have a team of skilled, experienced accountants at your back, the complexities of the process are more easily understood and tackled. Your chances of submitting a successful application are enhanced, and nothing is left to chance when you engage the services of MGB Accountants to assist with your business acquisition loan application.

Benefits of a Business Acquisition Loan

Some of the key advantages of a small business acquisition loan include:

Lower upfront cost—The additional loan funds reduce the capital requirement, so the total purchase amount can be reached without depleting cash flow. The loan can then be repaid using the profits from the acquired company.
Rapid market entry—When purchasing an established business using business acquisition loans in Australia, access to the new market is already in place. This allows the owner to focus on growing that market share and implementing successful new strategies rather than starting from scratch. Any existing customer base and brand reputation can be harnessed and augmented by altering operational processes and marketing tactics instead of building infrastructure.
Flexible security/collateral—Each lender has different requirements regarding collateral to secure the loan. Some may do so without substantial security, although costs, terms, and conditions may reflect that extra risk on their part.
Extended financing period—Acquisition loans for a business frequently offer options for long-term repayment. This allows the company to direct its resources elsewhere and manage cash flow.
Diversification and growth—Acquiring a new business provides excellent opportunities to enter new markets, rapid growth, and a more diverse portfolio.
Tax-deductible repayments—Repayments on the interest accrued from a small business acquisition loan are often tax-deductible, something you should discuss with your MGB tax planning expert for further clarification.
Professional support and expert financial advice—When you partner with experts like MGB Public Accountants, you gain access to an unrivalled wealth of knowledge and experience. This helps entrepreneurs expand into new markets with guidance and support, facilitating a smooth loan application process and transfer of ownership.

Types of Available Business Acquisition Loans in Australia

When you need a business acquisition loan from a reputable financial partner, MGB Public Accountants has the financial experts you need to negotiate the perfect solution. When cash flow requires an injection of funds to facilitate growth and other fundamental business requirements, you could not be in better hands. Some established methods for acquiring acquisition capital include:

Secured/unsecured loans
Commercial mortgages
Franchise financing
Asset-based lending
Combination loans

Each option has its advantages in different circumstances, and your experienced MGB accountant will gladly discuss them with you and help identify the perfect match.

How to Apply for a Business Acquisition Loan

After speaking to a representative at MGB Public Accountants, you will need to prepare the following documents for your application:

Bank statements and other financial documents—These include but are not limited to, tax returns and balance sheets.
A well-organised, detailed business plan: A meticulous acquisition proposal that cites profits, cash flow, and potential growth is essential.
Personal assets and liabilities—Any finances outside of the business must also be disclosed.
Collateral/security—Although not always required, some lenders may request evidence of property or other assets to secure your small business acquisition loan.

Factors that affect the timeline

Amount requested—The higher the amount needed to acquire the business, the longer the process can take.
Complexity of the transaction—The timeline will be extended if the acquisition is not straightforward or includes outside interests and other affecting factors.
Individual lender process—Each lender is different, and their speed of approval depends on internal processes and governance.

Contact Us About Business Acquisition Loans in Australia

Whether you require premium taxation services in Sydney, need assistance with your Business Activity Statement (BAS accounting services), or any other services, a small business tax return accountant from MGB is the perfect solution. We can help you secure the ideal business acquisition loan to suit your needs, so please contact us today to discuss your requirements.

FAQs

How do I qualify for a small business acquisition loan?

Qualifying for small business acquisition loans in Australia requires several criteria to be met and specific documentation provided. The primary requirements include:

Australian Citizenship or permanent resident status
Possession of an active ABN Australian Business Number (ABN) or Australian Company Number (ACN)
Sufficient, demonstrable revenue—You must show that your business generates sufficient income to make consistent payments on the loan.
Good credit history—Although bad credit does not necessarily invalidate any application, not all lenders will take the risk. Those that do will undoubtedly offer less favourable conditions and higher costs.
Relevant qualifications and experience—You may be asked to provide evidence of qualifications and experience that relate to the business you wish to purchase.

What are the interest rates for business acquisition loans in Australia?

Acquisition loans for a business are subject to varying interest rates, dependent on several factors, including:

The loan type
The lender
The borrower’s credit status

The following are general interest ranges:

Unsecured business loans

The lack of collateral (security) makes unsecured loans riskier for the lender. Consequently, interest rates are higher

Secured business loans

Backed by security assets, secured business loans are typically subject to lower interest rates

How long does the business acquisition loan approval process take?

The approval process for business acquisition loans in Australia can vary depending on the loan’s complexity, the lender, and the completeness of your application. Although some lenders offer expedited options where decisions can be reached in as little as a day or so, a non-expedited timeline is as follows:

Typical timeline

Application—The initial steps and submission of documents should take no more than a week.
Review/underwriting—This is the least predictable phase of any business acquisition loan application, and depending on the factors mentioned below, it can take anywhere between two and four weeks.
Decision/funding—Once approved, funds should be transferred in about one week or two at most.

You should expect the business acquisition loan approval process to take anywhere from a few weeks to a few months.

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