Table Of Contents
What Is Entrepreneurship Through Acquisition (ETA)?
Entrepreneurship through acquisition is the process where prospective entrepreneurs—often called “searchers”—raise capital to identify, purchase, and operate an existing business.
This is a faster path to business ownership instead of launching a startup from scratch.
This model mitigates many early-stage risks since the target typically has proven product-market fit, established processes, and steady cash flow.
Why ETA Appeals to Acquisition Entrepreneurs:
Lower initial risk: You avoid the uncertainty of new product development and market testing.
Faster path to business ownership: With due diligence and financing in place, you can start running and improving the business promptly.
Higher likelihood of financing: Lenders and investors view acquisitions as less speculative, especially when backed by SBA guarantees.
We Help You Buy / Build, Manage and Scale E-commerce Brands for an EXIT
E-commerce Simplified for Busy Individuals – We handle the buying, building, and scaling, so you can focus on what matters.
Growth-Focused Strategies – From sourcing to marketing, we drive growth and prepare you for a profitable exit.
Expertly Managed Exits – We build a high-value brand designed for a Lucrative exit.
An Overview of SBA Loans
Before we can even discuss whether SBA loans can fund your online business acquisition, let's first understand what these loans are and how they work.
The SBA 7(a) Loan Program
The 7(a) loan is SBA’s primary business loan vehicle. It offers you up to $5 million for acquiring, expanding, or refinancing businesses.
SBA guarantees you up to 75–85% of the loan, reducing lender risk and often resulting in more favorable terms for you.
Other SBA Loan Options to consider include:
504 Loans: This loan option is geared toward fixed assets like real estate or equipment, with up to $5 million.
Microloans: Offers you up to $50,000 for smaller acquisitions or working capital needs.
Why SBA Loans Work for Online Business Acquisitions
So, why are SBA loans a solid option for online business acquisitions? Let’s find out below:
1. Lower Risk Compared to New Ventures
When you buy an online business that already has steady sales and proven cash flow, lenders see it as a safer bet.
The SBA recognizes this stability and makes loans more accessible to you, offering you better terms like lower interest rates and longer repayment periods.
2. Long-Term, Low-Cost Capital
SBA 7(a) loans usually come with interest rates based on the prime rate plus a small margin, often staying under 8% APR.
You can repay these loans for up to 10 years, making them one of the more affordable ways to finance your business purchase.
This is especially true compared to other types of loans or private capital.
What’s The Eligibility Criteria for SBA Loans
Before you apply, it’s important to understand what makes a business (and a borrower) eligible for an SBA loan.
Here are the key requirements to keep in mind:
Business Location and Operation Requirements
Must be a for-profit business located and operating in the U.S.
Change-of-ownership transactions (complete or partial) qualify under 7(a) loans.
Credit and Financial History
The minimum FICO Small Business Scoring Service score is around 165 for 7(a) small loans.
Strong personal and business credit profiles bolster approval chances.
Industry Eligibility (Including E-commerce)
Most e-commerce, SaaS, digital marketing agencies, and content sites qualify, provided they generate income from lawful goods or services.
Preparing Your Online Business Acquisition for SBA Financing
Want to improve your chances of getting approved? Well, then make sure both you and the business you’re buying are ready for SBA financing.
Here’s precisely how to do that:
Quality of Earnings and Financial Statements: Make sure you have at least two years of clean, audited, or accountant-reviewed financials. Show consistent revenue growth, gross margins, and recurring customer metrics.
Demonstrate Proven Cash Flow: Use bank statements, merchant processor reports, and platform analytics (Shopify, Amazon) to help you verify monthly and seasonal trends.
Building a Compelling Acquisition Proposal: Outline your background, operational plan, and growth initiatives. Explain how you’ll enhance marketing, streamline operations, or expand product lines.
We Help You Buy / Build, Manage and Scale E-commerce Brands for an EXIT
E-commerce Simplified for Busy Individuals – We handle the buying, building, and scaling, so you can focus on what matters.
Growth-Focused Strategies – From sourcing to marketing, we drive growth and prepare you for a profitable exit.
Expertly Managed Exits – We build a high-value brand designed for a Lucrative exit.
SBA Loan Application Process
In this section, we’ll walk you through the KEY steps to apply for an SBA loan to finance your online business purchase.
The process isn't as complicated as it might seem, but being prepared can make the process much smoother for you.
Here are the steps to follow:
Step 1. Find an SBA-Approved Lender (Lender Match)
The first and most important step is to use the SBA’s free Lender Match tool to find an SBA-approved lender.
This helpful tool connects you with over 800 SBA-approved lenders in approx. 48 hours.
You’ll answer a few basic questions about your business and financing needs, and then interested lenders will reach out to you directly.
Step 2. Gather The Required Forms and Documentation
To continue with your application, you’ll need to collect and complete several key documents.
These will help the lender evaluate both your financial background and the business you plan to buy.
Common requirements include:
SBA Form 1919 (Borrower Information Form)
Personal and Business Tax Returns for the past three years
Business Purchase Agreement outlining the terms of the sale
Business Valuation Report showing the business is worth the purchase price
NOTE that your lender might ask for additional information depending on the deal or your personal financial situation.
Step 3. Typical Timeline and Turnaround
Once you submit everything, the SBA loan process usually takes 30 to 60 days from start to funding.
However, if you're applying through the SBA Express program, you might get approved and funded in as little as 5 to 10 business days.
Key Challenges for Online Business Acquisitions
Buying an online business can be a smart move, but it comes with its own set of challenges.
Below, we discuss what to watch out for to help you avoid costly mistakes and ensure your SBA loan process goes smoothly:
1. Valuation and Due Diligence
Proper valuation is a crucial part of the acquisition process, and due diligence goes beyond just looking at revenue numbers.
Pay close attention to the following:
Traffic Quality: Make sure the business’s web traffic is real and sustainable. Use tools like Google Analytics to verify that traffic isn't coming from bots, click farms, or other suspicious sources.
Platform Dependency: Check if the business is overly dependent on a single platform like Amazon, Etsy, or Facebook. If one algorithm change or account suspension could kill the business, that’s a major risk.
2. Asset vs. Stock Purchase Structures
When using SBA financing, asset purchases are generally preferred.
In this setup, you’re buying only the key assets of the business (like the website, customer list, and branding), not its liabilities.
This lowers the risk for both you and the lender.
However, stock purchases—where you buy the business entity itself—can work with proper legal structuring.
These are more complex and usually require approval from the SBA and thorough legal review.
3. Technology and Intellectual Property (IP) Considerations
Online businesses often rely heavily on software, branding, and customer data. During due diligence, you need to confirm that:
The seller actually owns the codebase, trademarks, and any other tech assets
There are no hidden licenses, third-party ownership, or unresolved legal issues
You can legally transfer and use customer data in compliance with privacy laws
Lenders may also require formal IP assignments to use those assets as collateral for the loan.
How We Can Help You Beat These Acquisition Challenges:
At Trend Hijacking, we specialize in helping buyers like you find and acquire profitable online businesses with strong growth potential.
Our team has a sharp eye for spotting the right opportunities.
And we don’t just stop at the deal;
We guide you through the entire acquisition process, including these key phases:
Valuation and due diligence to make sure you’re getting what you pay for
Negotiating with sellers to secure fair terms and protect your interests
Structuring the deal to meet SBA lending requirements and reduce risk
After the purchase, we don’t disappear. We work closely with you to run and grow your business, using proven strategies to scale it 2–4x.
When the time is right, we help you position the business for a profitable exit.
Alternatives and Supplemental Financing
While SBA loans are a suitable option for funding your online business acquisition, they’re not the only route.
Many buyers use a mix of financing sources to complete the deal or reduce their personal cash outlay.
Here are a few common alternatives and supplemental financing options to consider:
Seller Financing
In many small business acquisitions, the seller agrees to finance a portion of the purchase price.
This usually ranges from 10% to 30%, and the buyer repays it over 2 to 5 years, often at market or even below-market interest rates.
Seller financing not only helps you reduce the amount you need to borrow but also shows that the seller has confidence in the business continuing to perform.
Equity Partners and Investors
You can also bring in angel investors, private equity firms, or strategic partners to co-invest alongside your SBA loan.
These partners typically provide capital in exchange for equity or future returns.
This approach can help lower how much of your personal money you need to contribute upfront.
Moreover, it gives you access to experienced investors who can support your business growth.
Crowdfunding and Revenue-Based Financing
Newer financing models, such as crowdfunding and revenue-based financing, are gaining popularity, especially for online or digital businesses.
Platforms like Republic, Clearbanc (now Clearco), and others offer non-dilutive capital in exchange for a percentage of future revenue.
These options don’t require you to give up ownership, and they’re often faster and more flexible than traditional loans.
Frequently Asked Questions:
Can I use an SBA 7(a) loan to buy a dropshipping store?
Yes. As long as the business generates verifiable cash flow and you meet standard eligibility, dropshipping operations qualify under change-of-ownership guidelines.
What down payment is required for an SBA acquisition loan?
Generally, 10–20% equity injection, though strong financials and collateral can sometimes lower this to 10%.
How long does SBA approval take for an online business acquisition?
Standard 7(a) loans average 30–60 days; SBA Express can close in 5–10 business days.
Are virtual assets like domain names and customer lists acceptable collateral?
Yes, lenders can take security interests in intangible assets if properly documented.
Can first-time acquisition entrepreneurs qualify for SBA loans?
Absolutely. Demonstrating relevant industry experience and a solid integration plan often outweighs prior ownership.
Conclusion
So, can you get an SBA loan for an online business? Securing an SBA loan for your online business acquisition is highly possible, as SBA loans are intended for acquiring existing businesses, including online ones. To increase your chances of securing this loan, be sure to hone your acquisition criteria, assemble clear financials, and match with an SBA-approved lender.
With the right preparation and a clear plan, buying a proven online business can be your path to real entrepreneurial success.
If you’re serious about buying an online store but unsure what to do next, don’t wait and risk missing the right opportunity. Our Acquisition Partnership helps you move fast, buy smart, and scale your business 2–4x, so that when it’s time to exit, you're walking away with real profit.
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