Another One in the Books: Financing a Texas Auto Parts Store Acquisition

Another small business acquisition is officially in the books.

Small Business Lending, Inc. recently helped finance the acquisition of an established auto parts store in Jonestown, Texas with a $1,050,000 SBA 7(a) loan.

This was the kind of transaction we like to work on: an existing operating business, a real buyer with a clear acquisition plan, and a structure that needed to work for both the borrower and the lender.

The opportunity

The borrower was acquiring an established auto parts business serving a small-town Texas market.

For many buyers, purchasing an existing business can be a more practical path than starting from scratch. An established operation already has customers, employees, vendor relationships, operating history, and a recognizable presence in the community.

The challenge is often financing the purchase in a way that does not require the buyer to tie up an excessive amount of cash. That is where SBA 7(a) financing can be particularly useful.

Using SBA 7(a) for a business acquisition

The SBA 7(a) program can be used for eligible business acquisitions and can finance a combination of business assets, goodwill, equipment, inventory, working capital, and other qualifying costs. For this transaction, the final financing totaled $1.05 million.

Rather than simply matching the borrower with a lender, our role was to help structure the transaction, review the financial information, organize the loan request, coordinate with the lender, and stay involved through approval and closing.

That hands-on process matters on acquisition loans. Every transaction has its own questions around historical cash flow, purchase price, buyer experience, seller financing, collateral, working capital, and SBA eligibility. A deal that looks straightforward at the beginning can quickly become complicated once underwriting starts.

Working with the referral partner

This deal also came to us through a referral relationship. We actively work with business brokers, commercial mortgage brokers, real estate professionals, bankers, CPAs, and other referral partners who have clients needing SBA or commercial financing.

The referring broker stayed connected to the client throughout the process and was compensated for bringing us the opportunity. That is an important part of how we approach referral relationships.

We are not looking to replace the broker or take over the client relationship. Our job is to provide the lending expertise, structure the transaction, and help move the financing toward closing.

The referring professional keeps the relationship. We help get the deal financed.

Why deals like this matter

Small businesses like independent auto parts stores are a major part of the communities they serve. They employ local workers, support other businesses, generate tax revenue, and often provide products and services that larger national companies cannot deliver with the same level of local knowledge and personal service.

Helping the next owner acquire an established business is about more than closing a loan. It is also about helping a viable local business continue operating under new ownership. That is one of the reasons we enjoy working on business acquisition financing.

Another successful closing

The transaction is now closed and funded.

Loan Amount

$1,050,000

Loan Program

SBA 7(a)

Business Type

Auto Parts Store

Location

Jonestown, Texas

Loan Purpose

Existing Business Acquisition

Another one in the books.