Spring Is Business Buying Season. Are You Ready?
The deals are out there right now. The question is whether you’ll be ready to move when one shows up.
Every year, the same thing happens. Business brokers get busy. Commercial listings start to move. Buyers who’ve been thinking about it all winter — sitting on the idea, running the numbers in their heads, telling themselves “maybe this year” — finally start calling.
I’ve been doing this since 1982. Spring is real. The pickup isn’t a marketing line. Deal flow genuinely accelerates in April and May, and the buyers who close are almost never the ones who found the best deal. They’re the ones who were already ready.
Here’s what I mean.
The Problem With Waiting Until You Find Something
Most buyers approach this backwards. They spend months searching — looking at listings, talking to brokers, touring businesses — and only start thinking about financing after they’ve found something they like. Then reality hits. They don’t know their numbers. They haven’t pulled three years of tax returns. They’ve never heard of a debt coverage ratio. And the seller, who has two other qualified buyers waiting, moves on.
I’ve watched this happen more times than I can count. A motivated buyer, a solid business, a deal that absolutely would have worked — and it fell apart because the buyer wasn’t ready to move.
The fix is simple: get pre-qualified before you need it.
What “Ready” Actually Looks Like
Being ready to buy a business doesn’t mean having a specific deal in front of you. It means knowing three things cold:
- What the numbers say about you as a borrower. Three years of personal tax returns. A rough personal financial statement. A sense of your credit health. These aren’t things you want to scramble to pull together after you’ve found a business you love.
- What size deal you can realistically finance. The SBA 7(a) loan program goes up to $5 million. Business acquisitions typically require 20% down, with the other 80% financed. If you know your equity injection — the money you have available for a down payment — I can tell you your ceiling within a day.
- What the business needs to look like to qualify. This is where most buyers are completely in the dark. A business doesn’t just need to be profitable — it needs to generate enough cash flow to cover the proposed loan payments at a ratio of 1.25 to 1. The calculation is called the debt coverage ratio, and it determines the maximum loan amount more than almost anything else.
Here’s the good news: all three of these can be worked out before you’ve signed a single piece of paper. That’s what a pre-qualification is.
The Free EBITDA Analysis — No Strings
When a broker sends you a business that looks interesting, the first thing I do is run an EBITDA analysis. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization — it’s the number that tells us what the business actually earns in cash, after we strip away accounting adjustments that don’t affect real cash flow.
I do this for free, before any commitment is made. I’ll tell you what the business can support in terms of loan size, whether the asking price makes sense relative to the cash flow, and what the deal structure would look like. You’ll have the answer the same day.
That analysis is what lets you walk into a conversation with a seller or broker and say — with confidence — “I’ve had the numbers reviewed. I know I can close this.”
That’s a very different conversation than “I think I’m interested, I need to talk to my bank.”
What to Have Ready Right Now
If you’re serious about buying a business this spring, here’s what I’d suggest pulling together today — before any deal is on the table:
- Three years of personal tax returns (Federal, all pages)
- A rough estimate of your available down payment and where it’s sitting
- A list of any current personal debts — mortgages, car loans, etc.
- A general sense of what type of business and what price range you’re targeting
That’s it. You don’t need a purchase agreement. You don’t need to have found anything yet. You just need enough to have an honest conversation, and I can do the rest.
The Buyers Who Win This Spring
The buyers who close deals this spring won’t necessarily be the ones with the deepest pockets or the most experience. They’ll be the ones who did the preparation early, who can say yes quickly when the right opportunity shows up, and who don’t give a seller a reason to doubt them.
Getting pre-qualified now costs you nothing. Losing a deal because you weren’t ready costs you everything.
If you’ve been thinking about buying a business, text me. We’ll run the numbers and you’ll know exactly where you stand — before the competition does.
— Hershel Pierce SBA-Capital.com | In Business Since 1982
📱 Text: (214) 726-9000 📧 Email: pierce.pavbank@gmail.com
Not ready to buy yet but want to learn the ropes? Download the free SBA 7(a) Loan Readiness Workbook at SBA-Capital.com — everything you need to walk into any lender conversation fully prepared.