If the seller is offering a note or equity roll, can I finance the remainder of the purchase price with debt.

Likely, no. Regardless of any deal between the buyer and seller directly, typically lenders will require 5-20% in cash equity from the buyer. This ensures  the buyer has “skin in the game” and is fully committed to getting a deal done. Typically, seller notes do not count toward this cash payment. There are some exceptions to this rule but the more cash the buyer has to put down, the stronger the request will appear to lenders. 

Are company prepared financials enough for lenders?

Lenders don’t trust company prepared financials as much as they do audited statements, and therefore, this typically won’t be enough information for you to receive financing. Lenders will first verify the information provided with tax returns. If the tax returns do not match the company prepared financials, a secondary source of verification may be needed in the form of a Quality of Earnings (QofE) report. For larger acquisitions above $5 million, a QofE report will likely be required regardless.

The seller wants to close within 30 days. How quickly can I get a loan?  

Most multi-million-dollar loans take a minimum of 6 weeks to close and more likely between 2-4 months. This is, of course, dependent on the type of lender, size of the company, and loan size, among other things. If you attempt to rush into this process you could be red-flagged, and seen as trying to hide something from your lender. Don’t expect lenders to rush through their due diligence process. The only thing you can do to close a loan more quickly is to be fully prepared and immediately respond to your lender’s requests. Buyers should be wary of sellers that have unreasonable expectations on loan closing timelines.