Building Strong Relationships with Lenders: The Key to a Successful Business Acquisition
2/25/20254 min read
When it comes to buying a business, having the right lender on your side is just as important as finding the right deal. Whether you’re using SBA financing, conventional lending, or private funding, building strong relationships with lenders can make or break your acquisition.
One of the best ways to establish credibility with lenders is through referrals. A warm introduction from a trusted source—such as a broker, attorney, accountant, or fellow acquisition entrepreneur—helps establish an initial layer of trust and increases the likelihood of a lender taking you seriously.
In this post, I’ll share how to build relationships with lenders, the importance of referrals, and the key questions to ask (and be prepared to answer) when securing financing for an acquisition.
Why Strong Relationships with Lenders Matter
A lender isn’t just someone who provides funding—they’re a key partner in your acquisition journey. Having a strong relationship with a lender ensures that:
✅ You get pre-qualified early, making you a more competitive buyer.
✅ You understand financing structures and loan terms before making an offer.
✅ You can move quickly when the right deal comes along.
✅ You get access to industry-specific lending options, such as SBA loans for service businesses.
✅ You gain an advocate who can help navigate complex transactions.
A lender who knows and trusts you will be more likely to work with you through challenges and help structure a deal that works in your favor.
The Power of Referrals in Establishing Trust
One of the biggest mistakes new acquisition entrepreneurs make is cold-calling lenders without a referral. While some lenders may still be open to a conversation, a warm introduction through a trusted connection significantly improves your chances of getting a positive response.
🔹 Where to Get Lender Referrals:
✅ Brokers – Many brokers have relationships with lenders and can introduce you to those who specialize in your target industry.
✅ CPAs & Attorneys – Financial and legal professionals frequently work with lenders and can recommend those who understand small business acquisitions.
✅ Other Acquisition Entrepreneurs – Those who have already gone through the lending process can share their experiences and point you to reliable lenders.
✅ Networking Groups & LinkedIn – Engaging with acquisition-focused groups can help you identify lenders experienced in working with buyers like you.
📢 Pro Tip: If a broker, attorney, or accountant introduces you to a lender, mention their name in your outreach to build instant credibility.
Key Questions to Ask a Lender Before Moving Forward
Not all lenders are created equal. Before committing to a lender, you’ll want to ask the right questions to ensure they align with your financing needs.
1️⃣ What Loan Programs Do You Offer for Business Acquisitions?
Do you specialize in SBA 7(a) loans, conventional lending, or asset-based financing?
What are the minimum and maximum loan amounts?
2️⃣ What Are Your Experience & Requirements for My Target Industry?
Have you funded acquisitions in industries like pest control, HVAC, plumbing, and other service businesses?
Do you have specific industry preferences or restrictions?
3️⃣ What Are the Typical Loan Terms & Interest Rates?
What are the current interest rates for SBA and conventional loans?
What are your typical loan terms (length, down payment, collateral requirements)?
4️⃣ How Do You Evaluate a Buyer’s Qualifications?
What financial requirements do you expect from the borrower?
Do you require a certain amount of personal liquidity or net worth?
How does my business experience impact loan approval?
5️⃣ What Documents Do You Need for Pre-Approval?
What financial statements, tax returns, or credit reports do you require?
How long does it take to get pre-approved?
6️⃣ What Are the Closing Costs & Fees?
Are there origination fees, packaging fees, or guarantee fees I should expect?
How do closing costs compare between SBA and conventional loans?
7️⃣ How Do You Handle Seller Financing or Additional Capital Sources?
Can seller financing be used as part of the equity injection?
Are there any restrictions on using investor funding?
Asking these questions ensures you’re working with a lender who understands your acquisition goals and can provide financing that aligns with your deal structure.
Questions You Should Be Prepared to Answer
Just as you’re evaluating a lender, they’ll also be qualifying you as a borrower. Expect them to ask:
1️⃣ What’s Your Business Acquisition Experience?
Even if you haven’t acquired a business before, be ready to discuss:
Your career background and how it relates to business ownership.
Any management or financial experience that shows you can operate a business successfully.
📢 Pro Tip: If you lack direct experience, emphasize your deal team (accountants, attorneys, QofE specialists) who will assist with due diligence.
2️⃣ What’s Your Financial Situation?
Lenders will want to know:
Your credit score (especially for SBA loans).
Your personal liquidity & net worth to cover the required equity injection.
If you have other investors or financial backing.
3️⃣ What Type of Business Are You Looking to Buy?
Be specific about your industry focus, location, revenue size, and financial performance expectations. A well-defined search shows you’re serious and prepared.
4️⃣ How Will You Run the Business After Acquisition?
Lenders want to ensure you have a plan for operations post-acquisition. If you’re buying a business in an industry you’re unfamiliar with, they may ask if you plan to:
Retain the existing management team.
Bring in a new operator or general manager.
Undergo industry training or certification.
5️⃣ What’s Your Timeline for Acquisition?
Are you actively reviewing deals now?
Have you submitted any Letters of Intent (LOIs)?
When do you expect to close on a business?
Being prepared to answer these questions confidently and professionally helps establish trust with lenders and makes them more likely to fund your deal.
Final Thoughts: Building Long-Term Relationships with Lenders
Strong lender relationships aren’t just about getting financing—they’re about building long-term partnerships that support your growth as an acquisition entrepreneur.
📌 Use referrals to establish trust.
📌 Ask the right questions to ensure they’re a good fit.
📌 Be prepared to answer lender questions confidently.
📌 Nurture relationships even before you have a deal—being pre-qualified gives you an advantage.
🚀 Are you an acquisition entrepreneur looking to connect with lenders? Let’s network!
📩 Reach out via my website or LinkedIn to chat about business acquisition financing.