Business Acquisition Loans in Tennessee: Down Payments, Seller Notes and the File a Bartlett, TN Buyer Builds

Yes, a buyer can request financing to purchase an existing business, and an auto repair shop makes a clear example because its lifts, scanners and customer list keep producing after the sale. What a funding partner weighs is whether the shop's past earnings cover the new debt, how much of the buyer's own cash is in the deal, and whether the buyer can run a service bay. Terms, amounts and any decision belong to the partner.

The field is wide in Shelby County, TN: 331 auto repair and maintenance establishments had paid staff there in 2023, and 133 of them had fewer than five employees (CBP, NAICS 8111). The office ZIP alone, 38134, held 52 auto repair and maintenance establishments that year (ZBP). Garages run without employees sit in a separate count: Nonemployer Statistics recorded 1,901 automotive repair and maintenance businesses without paid employees in Shelby County, TN for 2024.

A business acquisition loan is a term loan used to pay a seller for a going concern: its equipment, stock, customer relationships and name. For a Bartlett, TN repair shop, the path from first conversation to closing runs like this:

1. The buyer and seller sign a letter of intent with the price and what it includes.
2. The seller provides tax returns, profit and loss statements and an equipment list; the buyer has them reviewed.
3. The buyer sends a request with the price, the cash available and the seller note terms.
4. A funding partner reviews the shop's records and the buyer's background and, if it makes an offer, sets the amount, rate and term.
5. At closing the loan, the seller note and the buyer's cash are paid to the seller, and the keys change hands.

The business loans overview compares a term loan with the other funding types that can sit beside it, such as a line of credit for parts stock after the sale.

With a seller note, the seller lets the buyer pay a slice of the price in monthly installments with interest after closing, rather than in cash on the day. An earn-out is a part of the price that is paid only if the business reaches targets after the sale, such as a level of revenue in its first year under the buyer. Both reduce the cash needed on day one, and both are negotiated between buyer and seller before a funding partner sees the file.

Illustration only, invented figures: picture a Bartlett, TN repair shop with four bays, priced at $480,000 in a signed letter of intent. The price is split three ways, and the rates are invented for the example, not offers.

In this example the buyer owes $5,925.78 a month on the two debts combined, which is $71,109.36 across twelve months. Over their full terms in this example, the buyer pays $544,058.40 on the loan and $83,517.60 on the seller note, both figures computed from the rounded monthly payments.

Before any partner looks at the deal, the buyer has to be confident in the price. For a service business, that starts with the seller's discretionary earnings: profit plus the owner's own pay and the one-time or personal costs the seller ran through the business. Each add-back should be backed by a receipt or a statement line, because an add-back that cannot be shown does not count.

In the invented example, the shop earned $165,000 a year for its owner. In this example, against $71,109.36 of yearly payments, that is 2.32 times the debt, leaving $93,890.64 before the buyer pays themselves. Whether that cushion is enough is the partner's call, not this page's.

• Equipment: lifts, alignment rack, diagnostic scanners and the year and condition of each.
• Customers: how many return each year and whether any fleet account is a large share of sales.
• Staff: which technicians stay after the sale and what they are paid.
• The lease: its remaining term and whether the landlord consents to a new tenant.
• Real estate: if the building is for sale too, it is a separate deal; Eaglestone Funding Group does not arrange property loans.

Cash runs short in the first weeks after a purchase, because the buyer pays staff and restocks parts before the new owner's first receipts settle. Illustration only, invented figures: a shop with a $9,600 biweekly payroll that plans a 45-day cushion will meet 3 or 4 paydays in that time, depending on when the first one falls, or $28,800 to $38,400.

That money is better arranged before closing than after. A working capital request or a line of credit sized to the payroll and the parts order lets the buyer pay the seller in full at closing without emptying the operating account in the first month.

A buyer who forms a new company for the purchase registers it through Business Services at the Tennessee Secretary of State; which filings a given deal needs, and in what order, is a question for the buyer's attorney. For counseling on the purchase plan, the Tennessee Small Business Development Center lists its centers across the state, and the SBA Tennessee District Office covers Tennessee.

The 2020-2024 American Community Survey reports 9.8% of employed Tennessee residents as self-employed (margin of error 0.2 points). For Bartlett, TN, the estimated self-employment share is 7.6%, and the reported margin is 1.2 percentage points.