Can I sue the seller of a small business for fraud, he inflated the revenue figures to increase selling price

This issue will fall squarely on the language of your asset purchase or stock purchase agreement. The seller should have had a section that may have been titled "representations and warranties" and in that section the seller would have made certain representations as to the financial statements of the company. If the seller has represented that the business made a certain amount of revenue per year while they owned the business, then you would have a claim if in fact that the business did not earn that revenue while the seller owned the business. The difficult part for you is that it is unlikely that the seller would have represented that your business would have made the same the revenue going forward, but the proof is in the document. Regardless of your claim against the seller, the banks are not likely to pursue to the seller for your claim. You will have to find a way to manage your current debt and in parellel seek recourse, if any, against the seller.