Frequently Asked Questions
19. There is substantial "goodwill" in the purchase price of the business.
Will that affect my ability to obtain a loan for the project?
It is often challenging to obtain financing for large amounts of business goodwill.
Typically, lenders don't like to finance goodwill because it does not represent
tangible assets and can't be used as collateral. If a project contains
significant business goodwill, the lender may expect the borrower to contribute a higher
percentage of cash to the deal to help finance the project, and/or the lender
may request additional collateral. In some instances, the seller may be willing
to finance the goodwill portion of the project.
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is funded in part through a cooperative agreement with the U.S. Small Business Administration
through a partnership with the University of Arkansas at Little Rock College of Business
and other institutions of higher education. All opinions, conclusions or recommendations
expressed are those of the author(s) and do not necessarily reflect the views
of the SBA. It is the goal of UALR to eliminate discriminatory harassment and
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