Loan for Business Acquisition

I have an opportunity to purchase a local business, and I would like to get some advice on financing this purchase.

I would be purchasing a Daycare Center. The purchase would be for both the business and the property that the business sits on.

The purchase price would be about $500,000.

The current apprised value of the property is $340,000. The business is currently making a profit of $95,000 annually.

The business has been in existence for the past 12 years with profits fluctuating from a low of $90,000 to a high of $150,000.

I currently have $50,000 for a down payment and a home that is paid off that is valued at $145,000.

But my credit score is not that good, 610.

What can I expect in terms of getting business financing for this acquisition. Where should I go first?

I would appreciate any help.

Thanks

How about:

Financing the real estate with a third party, and convincing the seller to finance the going concern?

Hello;

So i should get the current owner to seperate the two aspects of the deal?

and then purchase the real estate with a mortgage type loan seperatly from the business. and then try to get a commercial loan to purchase the business?

would i be able to get a commercail loan with the type of credit that i have?

thanks

Well what I was trying to say was that grouping the real estate and the business works for the seller more than it works for the buyer. Fact is, you could get a dozen people in this board alone willing to consider lending on the real estate. However, financing the acquisition of the business is a tough nut to crack and most lenders will not consider it.

From my point of view convincing the seller to finance the sale of the business would be the first avenue I would pursue.

what about SBA loans? would i have any options there?

thanks

I am almost in the same situation and have pretty much the same type of questions. I am trying to purchase a local bar & grill that has been in operation for 20+ years. My credit score isnt the best, but my problem is that i would not have anything other than the business its self to fall back on as collateral. The owner agreed to giving another couple interested in buying 20,000 as a down payment loan. The asking price is 85,000 and i would need to borrow close to 100,000 for operating capital, insurance, license, etc. Im not sure which way to go with this, it would be a shame to pass it up as it is a very profitable business.. Any suggestions would be greatly appreciated.

Thanks
Kelly

How about private money? Private investors want a good return on their money. They want to feel it is safe. If you can show them both, they will be intereted.