I worked for my dad the last 6 years. He passed last September, but had a
corporation for 15 years that contracted with FedEx Ground to deliver
packages to a certain coverage area. Since his passing my mom took over as
president, and now wants to sell. I've been running the business since the
1st of the year doing everything (deposits, payroll, etc...). I'd love to
keep it going (and I'm sure the 4 other drivers we have would like to as
well) but am not sure how to proceed, or what I would even need to know to
get a loan/grant/etc... Any help is much appreciated! Thanks!
Two ways - one already stated. Have your mother hold the note and you pay her
through the cash flow from the business.
Second, if you can come up with a small down payment, go to your local bank
and see if you can get a management buyout loan - either through them or via
a SBA loan. Banks tend to like management buyout loans. You could even get
the other drivers to sign on the note and all will own a share of the
business - no better way to ensure they stay loyal them to make them part
owners.
It was not clear whether the loan was to buy the business or to give it
working capital while it remains open. The easiest solution, unless there are
other reasons, is to have you mother write a note to finance it to you. You
pay her back from the revenues. This keeps it in the family and may help her
in the long run as well, compared to outsiders who will bargain the hardest
and may not run it well.
kmurray | Community Moderator |
8/27/2012 - 9:22 am
Hi,
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. You can visit our section about loans here; as for federal grants, they're typically aimed at specific industries and targeted causes identified by the government, such as scientific and medical research, conservation efforts, and so on.
What you are doing is acquiring an existing business. The way to finance the
purchase is usually with a term loan {of no more than 7 years} that would
require at least 20% Equity. The fact that you are helping to run the
business gives you insight as to the profitability of the business and gives
you a leg up on the possible competition.
However, you also have to take into consideration that while the business
might not be very profitable currently, it might be worth more to another
existing FedEx Ground contractor that might be able to squeeze more profits
from the route or routes owned by your Mother’s business. It is my
understanding that the routes themselves can be sold.
What you really need to do is gather some information. How much does your Mom
wants for the business? Does the business have any existing debts? Is the
business currently profitable? Are you aware of similar businesses or FedEx
routes sold in your area? For how much? If you cannot come up with 20%
equity, can you come up with 10%? Would your Mother be willing to carry 10%
to 20% of the sales price in the form of a stand-by note?
The best way to proceed depends on the answers to these and other questions.
There is no answer that fits all of the possible scenarios.
BMT | Window Shopper | 9/3/2012 - 1:01 pm
through the cash flow from the business.
Second, if you can come up with a small down payment, go to your local bank
and see if you can get a management buyout loan - either through them or via
a SBA loan. Banks tend to like management buyout loans. You could even get
the other drivers to sign on the note and all will own a share of the
business - no better way to ensure they stay loyal them to make them part
owners.
wsan12 | Performer | 9/2/2012 - 12:13 pm
working capital while it remains open. The easiest solution, unless there are
other reasons, is to have you mother write a note to finance it to you. You
pay her back from the revenues. This keeps it in the family and may help her
in the long run as well, compared to outsiders who will bargain the hardest
and may not run it well.
kmurray | Community Moderator | 8/27/2012 - 9:22 am
loanuniverse | Window Shopper | 8/24/2012 - 6:30 pm
purchase is usually with a term loan {of no more than 7 years} that would
require at least 20% Equity. The fact that you are helping to run the
business gives you insight as to the profitability of the business and gives
you a leg up on the possible competition.
However, you also have to take into consideration that while the business
might not be very profitable currently, it might be worth more to another
existing FedEx Ground contractor that might be able to squeeze more profits
from the route or routes owned by your Mother’s business. It is my
understanding that the routes themselves can be sold.
What you really need to do is gather some information. How much does your Mom
wants for the business? Does the business have any existing debts? Is the
business currently profitable? Are you aware of similar businesses or FedEx
routes sold in your area? For how much? If you cannot come up with 20%
equity, can you come up with 10%? Would your Mother be willing to carry 10%
to 20% of the sales price in the form of a stand-by note?
The best way to proceed depends on the answers to these and other questions.
There is no answer that fits all of the possible scenarios.
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