First-time buyers tend to discover financing halfway through a deal : after the letter of intent, when the clock is running. That's late. Financing shape should inform the offer from the beginning.
This is the sequence, from first look to closing table.
Before the offer: know what you can finance
Get your own financial house documented first : equity contribution, personal financial statement, credit profile, and resume. Then have an early conversation with a lender or advisor about what deal size and structure that supports. You'll negotiate far better knowing your real capacity.
Diligence: what funders will want to see
- Three years of financial statements and tax returns : reconciled with each other
- Customer concentration and revenue durability
- The quality of earnings: how much of the profit is repeatable?
- Any owner benefits hidden in the expenses that won't transfer to you
Structure and closing
Most acquisitions blend the buyer's equity, a funded portion (often SBA 7(a) for qualifying deals), and sometimes seller financing. Each element signals something: equity shows commitment, seller financing shows the seller's confidence. Expect the lender to verify payoffs and control the closing mechanics : start the process as soon as diligence looks real, not after.
Frequently Asked Questions
Want to explore your options?
If this topic relates to a funding need you have, you can begin a funding request through Kennify's financing partner at any time.