Introduction
Interest rates have been a major factor in acquisition financing over the last two years. As we move into 2025, buyers are asking: What does the financing landscape look like now? At Yaw Capital, we work exclusively on business acquisition financing and have a front-row seat to lender behavior. Here’s what buyers need to know about the market this year.
SBA Loans Remain Strong
Despite higher rates, SBA 7(a) loans continue to be one of the most attractive ways to finance acquisitions up to $5M. Why? Because SBA programs:
- Offer longer repayment terms (up to 10 years).
- Require lower equity injections (10–20%).
- Are more flexible than conventional bank loans.
Banks Are Conservative
Traditional banks remain cautious in 2025, especially for industries perceived as higher-risk. Strong financials, collateral, and buyer experience are essential for approval.
Private Capital Is Filling the Gap
Family offices, private equity groups, and alternative lenders are increasingly stepping in to fund acquisitions. These lenders are more flexible, though often more expensive than SBA or bank loans.
What Buyers Should Do in 2025
- Get prequalified early.
- Be realistic about leverage and debt coverage.
- Explore hybrid models that blend SBA, bank, and private capital.
Conclusion
2025 remains a strong year for acquisitions — but buyers must structure deals carefully. With Yaw Capital’s expertise, you can secure the right financing even in a high-rate market.
