How Pre-Approving Finance Will Help your Business get a Cash Buyer

Takeovers are hard to do complete for buyers, everything you can do to make the process easier for them helps

When selling a business, cash is king. Last week we covered successful payment plans, but let’s be honest: the best case scenario is a sale 100% cash up front. You want a buyer who can pay immediately, not one who needs to scramble for financing or negotiate a payment plan that leaves you waiting years for your full payout.

When you’re selling your business, the buyer is your customer, and the key to success in closing a deal with them is thinking with their mindset. They want to feel like they’ve got a great deal, and the main two ways of getting that is either paying a very low price or using very little of their own money. 

Obviously we don’t want them to pay a low price, so in order to get them to put in as little of their own money as is reasonable (you don’t want nothing - make them have at least some skin in the game) they need great financing options for an acquisition.

One powerful but often overlooked strategy? Pre-approving your business for a loan before listing it for sale.

This is common knowledge in other industries. Car salesmen and realtors almost automatically put their inventory and clients through credit checks to see what financing they can get, but business sales is such a lesser known area for entrepreneurs it’s usually left up to the buyer to ‘figure everything out’.

If you can show a buyer your business, its profit and its returns, and then finish the presentation with “Here is the price, and here is how you can get the money” it's a fait accompli. You’ve given a reasonable price that a bank has agreed and a straightforward path to takeover. It also leaves less room for the buyer to negotiate because the price is clear and not vague like in most small businesses. 

This also means employees have the ability to buy the company as well, adding another path to exit.

How to Build Business Credit for a Pre-Approved Loan

If your business has never operated with lenders, firstly you should assume this process takes 3-6 months from no score in order to build up solid credit lines.

Getting your business pre financed doesn’t necessarily mean you’ve done all the steps for the loan, you can just have letters of confidence from lenders if your jurisdiction has them. 

Start by talking to local banks and lending institutions that do acquisition lending and they will give you all the parameters that they need to prove a loan, remember it’s literally their job to lend money so they want to make it easy for you.

A business credit card paid off monthly, like the Amex gold card, also builds your scores.

If you’re American, getting pre-approved for the SBA loan scheme is a slam dunk, up to 80% financing right away. It’s critical to get pre-approved for this if you want a high chance of sale. 

Paying off little debts like lending off of equipment, credit cards and invoice financing will always give you more room for financing at the negotiating table. This gives two more benefits: that cash will very rarely be included in the purchase price, so you might as well spend it paying down existing lending or paying yourself, and that the more you can slim the final price the less taxes you and the buyer will pay, so you might as well chop off those debts if you get the same net money.

If your business is already pre-approved for financing, it removes uncertainty and makes it far easier for buyers to secure the deal—meaning you walk away with cash at closing.

Why This Matters for Getting a Cash Deal

Buyers love financing that’s already in place. If your business is pre-approved for a loan, it:

Attracts more buyers who wouldn’t have considered the deal otherwise.
Eliminates financing delays—buyers can move quickly to closing.
Gives you leverage—when buyers know financing is available, they’re less likely to push for seller financing or discounts.
Increases your chances of an all-cash payout—if a buyer can get a loan covering most (or all) of the purchase price, you get paid in full at closing.

If you want to sell your business for cash, making it easy for buyers to secure financing is one of the smartest moves you can make. A little preparation now can mean a faster sale, a smoother transaction, and more money in your pocket.

Have you considered pre-approving your business for financing before selling? let us know if you need an individual guide for this in the replies.

All the Best,
Unlocking Wealth Weekly