Commercial finance companies make loans on much the same basis as banks. While the interest rate such companies charge is usually higher than that charged by a bank, they are often willing to take more risk. It is rare for a privately-held business to be acquired without leveraging the business's assets in some manner, pledging them as collateral for a loan made either by the owner of the business or an outside lender. The owner has a strong incentive to provide financing if he feels it is necessary to get the price he wants for the business and has confidence in the buyer. An outside lender must be convinced that the loan's risk of failure is minimal and represents a profitable transaction.
Institutional lenders are generally conservative and concentrate rate primarily on repayment.
To obtain outside financing it is important to be well prepared and have the information that a lender needs to make a decision. Purpose of the loan 2. Amount required 3. Term desired 4. Source of repayment 5.