ChevyMan23 Posted April 2, 2007 Report Share Posted April 2, 2007 Iv got an opportunity to purchase a small business. Its a simple money maker, I know the setup well, b/c I've helped the current owners many times. The market is seasonal but a rather large market, and this a 1 of a kind business for the area. The income is nice, would not take up alot of my time, so i can keep my current job for the benefits. I was curious from the business owners in this board, about where you were able to get your funding. If you borrowed that is. What kind of bank or finance company should I look up?..Its not a large amount and i want to borrow 50% more than the cost of the purchase. TIA for any help. There always seems to be great information from this place. Quote Link to comment Share on other sites More sharing options...
orion :: SS Posted April 3, 2007 Report Share Posted April 3, 2007 Yep...banks (you'd better go with a SOLID business plan...be able to lay it out, and articulate for them exactly what it makes now, and what you'd do to keep it making $$$, etc, etc...). --------- ALSO - More small business purchases are owner financed than you think. Consider this: If the business is $100,000...you borrow $40,000 from the bank as a down payment, and pay the current owner $XXXX per month for 3-5 years. If you agreed on 8% (reasonable right now) and 4 years...you'd owe $60,000...and you'd pay $1465 per month for 48 months. As the owner/seller, he'd want a promissory note...and probably a personal guaranty from you (not you LLC or corp.). If you defaulted, he'd gain control of the business again. But as long as you were in good standing...you OWN it, and can do as you please with the assets, employees, etc... Food for thought - Brian Oh...the benefit to the current owner is that he makes an extra +$10,000 in interest on top of the purchase price...with limited risk. Makes this option attractive. AND it makes it easier for you to do, if the bank's not willing to finance it 100%. Quote Link to comment Share on other sites More sharing options...
ChevyMan23 Posted April 3, 2007 Author Report Share Posted April 3, 2007 well..the current owner is my brother-in-law. that helps alot. does any bank or credit union do thos?..or do i need to look for specific ones? Quote Link to comment Share on other sites More sharing options...
Black2003SS Posted April 3, 2007 Report Share Posted April 3, 2007 You need special commercial financing and usually 10-20% invested down. I have some links at work for commercial lenders who can assist you as my father and I are looking deep into purchasing a couple of small businesses. We have decided that we won't start something from scratch either. Its much easier to take over an existing business that is running ok to stellar. The places we are currently looking at are owned by a 62yr old man who wants to retire (as he should, he's been in business 35years) and thats it. Numbers look good, books look good. Some local banks and credit unions will offer financing, but it usually requires collateral like the equity in your home, or equity in large equipment/building/land the business is located on. Quote Link to comment Share on other sites More sharing options...
ChevyMan23 Posted April 3, 2007 Author Report Share Posted April 3, 2007 Well..1 big thing...its a mobile business. No property needed. And the asking price is actually less than what most of you guys paid for your truck. Quote Link to comment Share on other sites More sharing options...
Black2003SS Posted April 3, 2007 Report Share Posted April 3, 2007 Get an unsecured personal loan then f its that small. If it goes sideways, you file chapter 13 and wash your hands of the debt. They cant touch your assets incuding business assets and home if you file chapter 13 and you only pay pennies on the dollar on debts you discharge. I'm just giving you this advice in the unfortunate event of it going belly up. If you can increase your income and looks solid, go for it. Also, you may not even have to file 13, you might be able to afford the payments on its own. Citibank, bank of america, chase, national city and many credit unions will lend personal loans up to $50,000 over 5 years at mid to low teen interest rates. Quote Link to comment Share on other sites More sharing options...
ChevyMan23 Posted April 3, 2007 Author Report Share Posted April 3, 2007 Thanks for the advice Quote Link to comment Share on other sites More sharing options...
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