Conventional loans usually aren’t available in Arizona to finance the acquisition of a business and commercial loans are usually so expensive (high interest rates over a short loan term) that buyers usually prefer a small business loan from a lender who participates in the Small Business Administration (SBA) government-backed loan program. There are a number of SBA programs available, depending on the situation. A business broker will typically be knowledgeable about these programs and can help you understand the requirements and processes involved in obtaining such loans.
The SBA concept benefits both you and the lender. You pay an SBA loan fee that allows the lender to fund a loan that they couldn’t do conventionally. The lender receives an underwriting fee and gets a government-backed guarantee (currently 75% of the loan value) after liquidating the collateral if the loan goes into default. There are many factors that contribute to SBA loan approvability and the length of time needed to close a transaction is longer than a transaction involving seller financing.