CBB CBB Buyer Qualification & Acquisition Financing

Question 1

What is the first step a CBB broker should take when working with a prospective business buyer?

Accepted Answer

Qualify the buyer by assessing their financial capacity, experience, and acquisition goals

Answer

Show them all available business listings immediately

Answer

Have them sign an exclusive buyer representation agreement

Answer

Introduce them to SBA lenders for pre-approval

Question 2

What financial information does a broker typically request from a prospective buyer to assess their qualifications?

Accepted Answer

Personal financial statement, liquidity proof, and credit history

Answer

Only the buyer's annual salary

Answer

Business plan for the target acquisition

Answer

Reference letters from previous employers

Question 3

What is an SBA 7(a) loan most commonly used for in business acquisitions?

Accepted Answer

Funding the purchase of existing businesses, including goodwill and working capital

Answer

Financing the purchase of commercial real estate only

Answer

Providing operating capital for start-up businesses

Answer

Refinancing a business owner's personal mortgage

Question 4

What is the typical maximum loan amount for an SBA 7(a) business acquisition loan?

Accepted Answer

$5,000,000

Answer

$500,000

Answer

$1,000,000

Answer

$10,000,000

Question 5

What minimum equity injection do SBA lenders typically require from a buyer in a business acquisition?

Accepted Answer

10% of the purchase price

Answer

5% of the purchase price

Answer

25% of the purchase price

Answer

50% of the purchase price

Question 6

Which document formally requests financing from an SBA lender for a business acquisition?

Accepted Answer

Loan application package with business and personal financial statements

Answer

Letter of intent (LOI)

Answer

Confidentiality agreement

Answer

Business broker listing agreement