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Mergers can fuel growth, but hidden financial risks can wreck the deal
Merging with or acquiring another company is a great way to grow your business, but it’s not without its complexities. A recent report showed that the U.S. M&A market is growing with corporate deals expected to increase by 20% and private equity deals by 16%.
In addition to the hefty upfront cost, there are other financial pressures that can quickly add up. Legal fees, due diligence, and integration expenses alone can tack on an extra 6-8% to the total deal value. But it doesn’t stop there. Hidden costs like restructuring the acquired company, employee retention packages, and potential IT or operational upgrades can further stretch your resources. Cash flow disruptions are common as companies juggle these costs, and without careful financial planning, this can lead to liquidity issues at a critical time.
Avoid financial pitfalls in M&A with SBA support
Mergers and acquisitions (M&A) present exciting growth opportunities, but they also come with significant financial challenges. The good news is that SBA loans are available to help business owners manage these expenses. SBA loans offer flexible, government-backed funding to cover key expenses like legal fees, due diligence, and integration costs.
The SBA 7a loan is a popular financing option for M&A, providing up to $5 million in funding. This loan can be used for a wide range of purposes, including purchasing the business, refinancing existing debt, or supporting working capital needs. Its flexible terms and low down payments make it a smart choice for managing the financial demands businesses may face.
For M&A deals involving significant real estate or equipment purchases, the SBA 504 loan offers long-term, fixed-rate financing. Allowing you to secure essential assets while keeping your cash flow intact.
At First Bank of the Lake, we’ve helped countless businesses navigate the complexities of M&A financing. With over $1.1 billion in SBA loans provided, we specialize in offering tailored solutions to make your acquisition successful and affordable. Our experienced team understands the challenges and is here to guide you every step of the way, ensuring you secure the right financing for your business growth.
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The First Bank of the Lake rep and I bonded over faith, fishing and finance. They got my loan done in under 30 days in very, very trying circumstances.
Issac Reed
President, Reed’s Moving Services
If we ever need business capital, my first call would be to First Bank of the Lake. Why would I look elsewhere?
Barry Norfleet
Co-founder, Lifetime Green Coatings - Kentucky
I got my $345,000 SBA loan approved from First Bank of the Lake in 35 days!
Kasia Anderson
President, Woof Gang Bakery - Bradenton, FL
First Bank of the Lake was the best banking experience I have ever had.
Andy
Co-founder, President, Winter Park Ski Rental
The bank process was as easy it could be. The biggest thing is how transparent and reliable they were.
Tyler Green
Co-founder, President, Freelite AZ
My First Bank of the Lake rep was great – Easily the finest banker I have dealt with in my life.
Dan Billings
President, Tint World - San Antonio
Big thanks to Emil and the First Bank of the Lake team. I would recommend them to anyone else in a heartbeat and I would absolutely use them again.
Rock Katic
President, Perfect Moving
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We made $600MM in SBA loans in the last year alone
