My in-laws own a thriving convenience store/gas station in a rapidly growing small town that currently brings home about $180,000/year. The business is about 25 years old and has grown every year. They are looking to retire by selling the business outright (they want out of any liability, etc) and we would like to purchase this business from them.

How/where do we even begin to apply for a loan - probably in the ballpark of $600,000? I currently work as an I.T. team lead in a large, aerospace corporation and would be quitting if this goes through. We can only do about a 10% down payment, and we have decent credit. We also already have a $180,000 mortgage on our home with $50,000 equity in it.

We're just not sure where to even begin - or if this is even feasible. Most banking websites I've looked at don't directly speak of loans for business purchases - just loans to existing business owners.

do you have any experience running a store?

The SBA guaranteed loan program can be used for business acquistions. There are special rules for purchases among family members, but the primary issue is that the price not be inflated. That issue usually is resolved by an appraisal, which is almost always required anyway.

You can look at the SBA website, www.sba.gov, for additional information. That site lists the local offices, which is one way to locate lenders in your area who are participating in the program. Or feel free to contact me for more details.

For business only purchases, SBA lenders generally finance up to 70% of the purchase price. You'll need to come up with that much down. An option might be to have your inlaws finance the purchase.

No, I don't have experience running the store. However, my in-laws probably won't actually sell the business for another year due to retirement savings goals. So my plan right now is to look into financing, ensure we can get approval, understand the process, etc. This gives me a year to work part time in the store learning how they run it today.

I've been calling around - having a hard time finding SBA lenders in my area - is there an authoritative source with location searches, etc?

which state?

Most commercial banks have a SBA loan division or loan officers familiar with SBA loans. However, each lender's underwriting criteria is different and your situation is unique so it may be a while before you find the right lender. I suggest you speak with a commercial loan/mortgage broker. It won't cost you anything to go through a commercial mortgage broker since the SBA prohibits brokers charging points to borrowers. It will save you a lot of time and effort. SBA lenders compensate brokers by paying a referral fee. Hope this helps.

So, I've talked with lots of banks now...

Seems my issue is no experience. They want someone to have several years owner/operator experience before lending. How do you get experience if you can't get financing?? ARGH!

Ah yes, that pesky experience requirement. If you see it from the lender's perspective, they want to make a loan to someone who won't run the business into the ground because they want the loan repaid with interest. Prior experience gives them some comfort. You have two options, either you gain experience running a similar business part time or you hire/partner with someone who has that experience. If you choose to go with the hire/partner option, lenders will want to see a resume and financial information as well on your hire/partner. Good luck.

We're having some luck with a local bank in town. Our situation is a bit unique since my husband and I and his parents (current owners) all live on the same street, less than a mile from the business. They are going to be around to help - they're not going to let us fail.

Still looks like its going to have be about a two to three year process with us a partial owners and operators. Frustrating because the parents just really want to be legally 'out' as soon as possible. Hard on them because there are other offers available now.

Any additional options or input are appreciated.