My Wife and I want to buy an existing business that does about $2 million a
year in sales and provides about $250,000 a year in income. The purchase
price is going to be around $800,000 and we basically have nothing, except
our experience (30+ years) and our time to dedicate to this new venture.
There is a huge opportunity to increase sales without increasing overhead
(under utilized facility, eliminate 2-employees with ourselves, etc.). It
will be a woman owned business (she is the creative mind of the pair) located
in a HUB Zone. Where is the best place to find a loan to buy this business
with little to no money down (the owner may carry 20%).
Thank you!
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Good day all, I was so stressed out about getting a personal loan from banks, the terms and conditions was so so hard to meet and i almost gave up on getting a loan to start up a new small scale business in supplies and i was advised to try online loan services and I did but was very skeptical about the whole idea, but i got in touch with a private loan company Huntington Micro Loans via email and they promptly responded to me with their terms and conditions which was very straight forward and easy, i thought it was a joke or one of those internet scams when i was asked to insure my loan amount as the only security needed to get my disbursement to me, i was shocked when my money was transferred to me and i am happy to say that i will be finishing my loan repayment in July for a tenure of loan of a period of two years. You can contact them via email, I really recommend them to all, they are fast and very reliable.( I got $150,000 but don't know if they can grant you up to what you need but you can email them)
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loanuniverse | Window Shopper |
8/20/2012 - 11:14 am
As mentioned by others, lenders will require the buyer to have some equity in
the deal. The SBA will allow seller financing to count as equity injection if
the seller financing is in stand-by {no payments of principal or interest on
it}. Interest can accrue, but it can not be paid. The risk appetite of
lenders can vary, but at a minimum most will look for 10% equity from the
buyer, and an additional 15% in stand-by debt from the seller.
In addition to that, the business must provide sufficient cash flow to repay
the debt, and must be independently valued by a third-party to make sure that
you are not paying $800,000 for something worth $400,000.
kmurray | Community Moderator |
8/13/2012 - 4:51 pm
Hi,
As BMT suggested, try getting in touch with a local Small Business Development Center, which is one of SBA's resource partners. They're located across the country andprovide free business counseling and answers. Visit SBA Direct to find your local SBA resource partners by entering your zip code. Best of luck!
Your best bet is a SBA loan. However, they too will require a down payment.
Call around to local banks in your area and see who offers SBA loans. If real
estate and equipment is involved, you might also call your local community
development corp and ask about their 504 programs.
You could also trying calling your local SBDC, SCORES or SBA office to see
who they know are providing SBA loans in your area.
Do know that most lenders will still require you to put in some equity
(regardless of what the current owner is doing). If you believe in the
business and your ability to manage it - look to equity in your home or other
places you can find some liquidity. 30 + years of experience you should have
something that can back that up.
If the owner will carry 20% - maybe you can convince them to finance the
entire thing. You come up with 20% down and amortize the rest over 20 or 25
years with a 5 year balloon. This will give you five years to show a lender
what you have and can do.
If you are seeking some type of loan due to being in an underserved area,
then you should contact your local city or county government (even your
chamber of commerce) to see if they know of any local programs that you might
qualify for - it would be a long shot but it never hurts to ask.
Robert2000 | Window Shopper | 2/27/2013 - 7:19 am
princejay | Window Shopper | 2/24/2013 - 1:07 am
ivok | Window Shopper | 8/21/2012 - 5:30 am
loanuniverse | Window Shopper | 8/20/2012 - 11:14 am
the deal. The SBA will allow seller financing to count as equity injection if
the seller financing is in stand-by {no payments of principal or interest on
it}. Interest can accrue, but it can not be paid. The risk appetite of
lenders can vary, but at a minimum most will look for 10% equity from the
buyer, and an additional 15% in stand-by debt from the seller.
In addition to that, the business must provide sufficient cash flow to repay
the debt, and must be independently valued by a third-party to make sure that
you are not paying $800,000 for something worth $400,000.
CarTran | Window Shopper | 8/19/2012 - 2:45 pm
documentation.
May take a a week or 2 to get approved.
kmurray | Community Moderator | 8/13/2012 - 4:51 pm
BMT | Window Shopper | 8/12/2012 - 9:47 pm
Call around to local banks in your area and see who offers SBA loans. If real
estate and equipment is involved, you might also call your local community
development corp and ask about their 504 programs.
You could also trying calling your local SBDC, SCORES or SBA office to see
who they know are providing SBA loans in your area.
Do know that most lenders will still require you to put in some equity
(regardless of what the current owner is doing). If you believe in the
business and your ability to manage it - look to equity in your home or other
places you can find some liquidity. 30 + years of experience you should have
something that can back that up.
If the owner will carry 20% - maybe you can convince them to finance the
entire thing. You come up with 20% down and amortize the rest over 20 or 25
years with a 5 year balloon. This will give you five years to show a lender
what you have and can do.
If you are seeking some type of loan due to being in an underserved area,
then you should contact your local city or county government (even your
chamber of commerce) to see if they know of any local programs that you might
qualify for - it would be a long shot but it never hurts to ask.
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