Looking for information to buy a plant nursery offered to me from friend.
Business has 17yrs of market experience and 15yrs online market experience.
Business plan includes a phase buy out to allow adjustments of plants and to
carry over context of business easier. Great income for small mom and pop
with intentional hold backs for progression from current holder due to age.
Issues with personal self is a high unpaid medical bill from severe accodent
years ago. Need information to get around my medical debt (which I am very
healthy) to gain access to money for the nursery.
1) Since this is a plant nursery this is good because there is a good chance
that there is real estate involved. The tangible collateral of real estate
might make some lenders a bit more comfortable with the request.
2) You said this is a friend, would this friend be willing to take a junior
position lien behind a lender? This can also make the lender feel more
comfortable.
3) There is no way to get around existing debt. You need to find out if it is
adversely impacting your credit. Get the free credit reports. I would make
sure to disclose it in the application also as keeping that from the lenders
would be fraudulent. If this is the only blemish in the credit report, the
lenders might be receptive to an explanation.
4) Before you start thinking about the medical debt, please stop and analyze
the whole business purchase. There are a series of good articles about this
subject in this site, just look for “Buying an Existing Business”
Here are my comments:
1) Since this is a plant nursery this is good because there is a good chance that there is real estate involved. The tangible collateral of real estate might make some lenders a bit more comfortable with the request.
2) You said this is a friend, would this friend be willing to take a junior position lien behind a lender? This can also make the lender feel more comfortable.
3) There is no way to get around existing debt. You need to find out if it is adversely impacting your credit. Get the free credit reports. I would make sure to disclose it in the application also as keeping that from the lenders would be fraudulent. If this is the only blemish in the credit report, the lenders might be receptive to an explanation.
4) Before you start thinking about the medical debt, please stop and analyze the whole business purchase. There are a series of good articles about this subject in this site, just look for “Buying an Existing Business”
Good luck
Thank You! My medical debt does affect my credit a great deal! I'll have to
talk about this to my friend if he is willing to take such a role! He is
willing to sell the company in parts while working with me over a couple
years. No real time limit has been established.
Here are my comments:
1) Since this is a plant nursery this is good because there is a good chance that there is real estate involved. The tangible collateral of real estate might make some lenders a bit more comfortable with the request.
2) You said this is a friend, would this friend be willing to take a junior position lien behind a lender? This can also make the lender feel more comfortable.
3) There is no way to get around existing debt. You need to find out if it is adversely impacting your credit. Get the free credit reports. I would make sure to disclose it in the application also as keeping that from the lenders would be fraudulent. If this is the only blemish in the credit report, the lenders might be receptive to an explanation.
4) Before you start thinking about the medical debt, please stop and analyze the whole business purchase. There are a series of good articles about this subject in this site, just look for “Buying an Existing Business”
Good luck
From my discussion with a friend that specializes in SBA lending. {he is a
banker that does a lot of SBA loans, but he is not an SBA official}, this
much I learned.
- In a business acquisition, he can go up to 10 years.
- If there is real estate involved, there are ways were the whole loan can be
up to 25 years.
- For a business acquisiton without real estate, the equity needs to be 20%
- If the seller is willing to take a subordinated position, and put that
subordinated debt into partial standby. That can be counted as part of the
equity.
- The whole deal like most commercial lending depends on cash flow. So it is
time to get familiar with that concept, and the concept of debt service
coverage.
loanuniverse | Window Shopper | 8/6/2012 - 2:21 pm
1) Since this is a plant nursery this is good because there is a good chance
that there is real estate involved. The tangible collateral of real estate
might make some lenders a bit more comfortable with the request.
2) You said this is a friend, would this friend be willing to take a junior
position lien behind a lender? This can also make the lender feel more
comfortable.
3) There is no way to get around existing debt. You need to find out if it is
adversely impacting your credit. Get the free credit reports. I would make
sure to disclose it in the application also as keeping that from the lenders
would be fraudulent. If this is the only blemish in the credit report, the
lenders might be receptive to an explanation.
4) Before you start thinking about the medical debt, please stop and analyze
the whole business purchase. There are a series of good articles about this
subject in this site, just look for “Buying an Existing Business”
Good luck
Dharma5433 | Window Shopper | 8/9/2012 - 7:46 pm
talk about this to my friend if he is willing to take such a role! He is
willing to sell the company in parts while working with me over a couple
years. No real time limit has been established.
loanuniverse | Window Shopper | 8/6/2012 - 3:42 pm
banker that does a lot of SBA loans, but he is not an SBA official}, this
much I learned.
- In a business acquisition, he can go up to 10 years.
- If there is real estate involved, there are ways were the whole loan can be
up to 25 years.
- For a business acquisiton without real estate, the equity needs to be 20%
- If the seller is willing to take a subordinated position, and put that
subordinated debt into partial standby. That can be counted as part of the
equity.
- The whole deal like most commercial lending depends on cash flow. So it is
time to get familiar with that concept, and the concept of debt service
coverage.
kburger | Community Moderator | 8/6/2012 - 11:53 am
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