Loans for goodwill-heavy business?
by pmignini, Window Shopper
- Created: September 16, 2010, 9:13 am
I am working to purchase a business with cash flows (owner benefit) of about $280,000 a year. Unfortunately, this business is largely internet-based, so it has few hard assets and minimal inventory. As such, the three institutions to which I applied for financing all rejected the applications because of the low hard asset value and high goodwill. The financials all justify the loan (down payment of 60%, cash flows that cover the loan values, salary plus other earnings), and my credit history, experience and other criteria is strong (industry experience, high personal credit score, home with $200k+ in equity). FYI, the total loan amount would be between $500 and $700k.
Has anyone had luck getting an SBA-backed or other loan for a business with high goodwill and low 'hard assets?'
I find the discussions very disheartening. Each lender said they would lend the money if I had more personal assets to guarantee the loan. This was said despite the fact that I was, in all cases, applying for SBA 7a loans from preferred SBA lenders, which are guaranteed at 75-90% of the loan value. If a government-backed loan doesn't work, I feel like my options are few. Help!
- Community Home
- Discussion Boards
- Tell Us...
- Discuss Popular Topics
- Developer Resources
- Social Media