Starting a business can take months -- and can be expensive. Also, it's tough to anticipate some of the problems you'll run into. That's why buying a business can be a good alternative.

So where do you get financing? One approach is to get a Small Business Administration loan.

Basically, this is like any other business loan. However, the main difference is that the loan is guaranteed up to 85% from the SBA, which is a federal program. Because of this, there are usually advantages versus conventional loans, such as:

• Longer terms (10 years for the business, and 25 years if there is real estate involved).
• Lower interest rates (prime rate plus 2.25% to 2.75%)
• Lower down payments (20% to 30% or so). In fact, the down payment also includes seller financing.

OK, what does it take to get such a loan? Let's take a look.

Credit History and Collateral. According to Scott Gabehart, the author of The Business Valuation Book (with CD-ROM): "You don't need a perfect credit score. But it's important that you don't have personal bankruptcies and charge-offs."

He also says that collateral is a big help. Some of the things you can use include are your 401(k), financial assets, and home (assuming there is equity).

Business Plan. "A business plan can be five to ten pages," says Brian Carlson, who is the CEO of Excel National Bank in Beverly Hills. "I want to see cash flow projections and a strong understanding of the industry. For example, if you want to buy a Subway location and your business plan assumes a $15 average menu ticket, then there is a problem."

Types of Businesses. For the most part, some businesses have more risk than others. That is, a restaurant has a fairly high default rate. Then again, a franchise restaurant is likely to be a much better bet.

Thus, it's a good idea to do some research on various sectors.

Relevant Business Experience. Banks want to see that you have a good background with managing operations, hopefully in the industry you plan to buy a business in. If not, it's a good idea to work in the industry for a few years.

Resources. Finally, you can get some helpful tools, such as business plan templates, from the SBA. What's more, there are some good books about SBA loans, such as The SBA Loan Book: Get a Small Business Loan -- Even with Poor Credit, Weak Collateral, and No Experience.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.