Definition of Acquisition loan:
Money borrowed in order to purchase real estate. For example, a developer can secure an acquisition loan to purchase a piece of property and a construction loan to begin development on that property. See also Acquisition, Development, and Construction (ADC) loan.
An acquisition loan is a loan that's given to a company to purchase a specific asset, to acquire another business, or for other reasons that are laid out before the loan is granted. Typically, a company can only use an acquisition loan for a short window of time and only for the agreed upon purpose.
An acquisition loan is sought out when a company wants to acquire an asset or company but doesn't have enough liquid capital to do so. The company may be able to get more favorable terms on an acquisition loan because the assets being purchased have a tangible value, as opposed to capital being used to fund daily operations or to release a new product line.
How to use Acquisition loan in a sentence?
- There are set rules on what an acquisition loan can be used for as well as the time in which it can be used.
- An acquisition loan is a loan that allows a company to purchase an asset or to acquire another company.
- There are many different types of acquisition loans, such as startup loans, SBA loans, equipment financing, and business expansion loans.
Meaning of Acquisition loan & Acquisition loan Definition