Stefan recently asked a fantastic question:

“What can I do to prepare for the questions a banker will ask when I seek financing to buy a business?”

It’s a smart question—and an essential one. Whether you're new to business acquisitions or already searching for the right deal, preparation can make or break your ability to secure funding. https://youtu.be/RZt7rOhLrWo

Step One: Preparation

Like any sport, success in financing comes down to practice and preparation.

Know the Business and the Plan

You need to know two things cold:

The business you’re trying to buy.
Your plan for that business after the purchase.

This includes being ready to discuss:

Sales forecasts
Gross margin assumptions
Operational changes you plan to make
How you’ll manage cash flow and debt service

For example, if a banker asks, “Why do you think the gross margin will improve over the next two years?” you should have a clear, confident answer like:

“I plan to renegotiate supplier contracts and reduce waste, bringing my cost of sales down from 40% to 38%, which will enhance gross margin.”

The better you know these numbers—and the logic behind them—the more credible and prepared you’ll appear.

Step Two: Find the Right People to Practice With

If your current circle isn’t made up of business-savvy people, it’s time to expand your network.

As Jim Rohn famously said, “You are the average of the five people you spend the most time with.”

Start connecting with like-minded individuals by joining:

Kiwanis Club or Rotary
Entrepreneurial Meetup groups
Professional organizations or church business groups

Once you've surrounded yourself with smart business minds, role-play the banker meeting. Ask a trusted peer to play the banker and challenge you on your plan.

Step Three: Practice with Real (But Unlikely) Bankers

Here’s a trick I’ve used with clients that works incredibly well:

Make a list of banks that are unlikely to fund your deal.
Book meetings with them—yes, the ones who will almost certainly say “no.”
Present your plan, answer their questions, and let them turn you down.

This is invaluable practice. Just don’t allow them to run a credit check.

You’re not looking for approval—you’re training under real conditions.

By the time you reach the bank that might actually say yes, you’ll have refined your pitch, prepared for hard questions, and developed real confidence.

The Bottom Line

When it comes to getting financing to buy a business, you can’t wing it. You have to show up prepared, polished, and practiced. This process will not only improve your chances of approval but also help you better understand the deal you're about to take on.

If you're thinking about buying a small business, head over to www.BusinessBuyerAdvantage.com where I share free resources and a step-by-step program to help buyers succeed.

Don’t forget—join my email list for early access to my latest videos and insights at DavidCBarnettList.com. You’ll even receive 7 FREE gifts when you sign up.

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Stefan recently asked a fantastic question:
“What can I do to prepare for the questions a banker will ask when I seek financing to buy a business?”

#BusinessAcquisition #AcquisitionFinance #SmallBusinessLoans #BuyABusiness #BusinessFinancing #BankMeetingTips #StartupFinancing #BusinessCoaching #EntrepreneurTips

CASE STUDY

How to Prepare for a Banker’s Questions When Financing a Business Acquisition

Stefan recently asked a great question:

“What can I do to prepare for the questions a banker will ask when I seek financing to buy a business?”

Whether you’re at the early stages of deal searching or ready to pull the trigger on a purchase, preparation is absolutely essential when it comes to getting a lender on board.

🎥 Watch the full video: https://youtu.be/RZt7rOhLrWo

🔑 Step 1: Know the Business and the Plan—Cold

You must walk into the meeting with crystal clarity on two things:

The business you’re buying
Your operational plan post-acquisition

Expect detailed questions around:

Revenue projections
Gross margin assumptions
Operational efficiencies
Staffing and leadership
How you’ll manage cash flow and debt repayment

Example:

If a banker asks,
“Why do you think gross margin will improve?”

Don’t guess. Say something like:

“I’ve identified supplier contracts that I plan to renegotiate, and I’ll implement inventory controls to reduce waste. That should reduce the cost of sales from 40% to 38%, lifting our gross margin.”

This level of detail builds credibility and shows you’re not just dreaming—you’ve done the math.

👥 Step 2: Surround Yourself with Smarter People

You are, as Jim Rohn said, “the average of the five people you spend the most time with.” So if your circle doesn’t include financially literate businesspeople, it’s time to upgrade your environment.

Consider:

Kiwanis, Lions, or Rotary Clubs
Local entrepreneur meetups
Industry-specific associations
Church or alumni business groups

Once you’ve connected with like-minded peers, role-play your banker meeting. Have someone grill you on your plan. You’ll discover holes in your thinking and practice giving confident, numbers-based answers.

🏦 Step 3: Practice with Real Bankers—That You Don’t Expect to Say Yes

Here’s a surprisingly effective technique:

Make a list of lenders who are unlikely to finance your deal.
Book meetings with them anyway.
Present your deal as if you were serious.
Get feedback and practice fielding real-world objections.
Don’t allow credit checks—you’re only there to learn.

These meetings are practice, not pitches. By the time you talk to your actual target lender, you’ll be sharp, ready, and battle-tested.

🧠 Bonus: Preparation Helps You, Not Just the Bank

This process isn’t just about getting approved. It helps you:

Spot weaknesses in your deal or assumptions
Develop a tighter business strategy
Gain the confidence to negotiate from strength

🚀 Ready to Buy a Business?

If you’re planning to buy a small business and want to reduce your risk and increase your chances of success, check out my Business Buyer Advantage program at www.BusinessBuyerAdvantage.com. It’s full of step-by-step training, checklists, and real-world insights.

📬 And don’t forget—join my email list at DavidCBarnettList.com for early access to my videos and articles. You’ll even get 7 FREE gifts just for signing up.

Remember: Banks don’t just fund dreams—they finance solid, well-reasoned plans. So go in prepared, and you’ll walk out empowered.

Cheers,
David C. Barnett

Saturday, June 14, 2025

How to Prepare for a Banker's Questions When Seeking Business Acquisition Financing