Learn How Your Business Clients Can Buy a Competitor’s Assets

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Business owners and prospects always want to know how you’ll help them win. One of the most powerful ways to prove your value is by showing you understand both the challenges they face and the opportunities that drive growth—like acquiring a competitor’s assets.

Sharing valuable insights positions you as a trusted advisor, not just another banker pushing products and rates. When a prospect or client mentions buying a competitor, it’s your chance to step in with guidance that sets you apart and opens the door to financing.

Below are the key steps every business owner should know when planning to buy a competitor’s assets:

1. Get Legal Advice
   To avoid taking on hidden liabilities, buyers often purchase only a company’s assets—not its debts. But be careful: in some states, buyers are still on the hook for unpaid excise taxes, workers’ comp premiums, and unemployment taxes. Bring in an experienced attorney early to structure the deal and prevent nasty surprises later.
2. Analyze Financial Statements
   Dig deep into what the business owns and how it’s valued on the balance sheet. Assets can include cash, receivables, inventory, equipment, real estate, and intellectual property. Always conduct a physical inventory, verify receivables against purchase orders, and pay special attention to the trickier valuations of intangibles like customer lists and online assets.
3. Determine the Real Value
   Don’t rely on book value—market value often tells a very different story. Buildings might be worth more than their depreciated cost, but receivables may need to be discounted if customers won’t pay a new owner. Check for any liens, loans, or judgments and confirm they’re cleared before closing. Depending on the asset size, bring in a professional appraiser to be sure.
4. Negotiate the Price
   Licenses, franchises, and contracts may look like assets—but many can’t be transferred without approval. Franchisors and landlords often have the final say. Once you understand the assets’ value and any restrictions, you can negotiate a fair price. If the seller is financing part of the deal, expect the assets to secure the note.
5. Secure Financing
   There are several ways to fund an acquisition:

• SBA 504 and 7(a) loans are a good fit and offer terms up to 25 years. Reach out to me if you want more information on the SBA loan programs: [email protected] or (310) 210-4571.
• Conventional business term loans are another option, though approval is tougher.
• Seller financing can cover all or part of the purchase.
• Home equity lines can provide cash injections if needed.

Start building your insight inventory now. When you consistently deliver guidance like this, you don’t just sound like a business banking pro—you become the go-to resource your clients and colleagues trust. That’s how you rise to the top.

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