Full Version: Business Acquisition Loan
I want to purchase a business without real estate in Milwaukee, Wi The purchase price is 500k and I will need about 100k working capital (total loan is 600k). The cash flow is a little more than 225k. Net worth of business assets is about 25k Seller willing to finance about 20% (130k). I have sufficient management experience and my credit score is almost 700. I have about 345k in real estate assets and over 40k cash. What options do I have for structuring this deal (if any)?
The SBA guaranteed loan program provides for business acquisition funding. Different lenders have different criteria, but you usually will be required to invest between 10%-20% into the transaction. Seller financing is permitted in a subordinated position. Some industries (gas stations, c-stores, restaurants, for example) are very hard to get financed. Others are easier. Cash flow, personal credit and experience are important factors--from your post, these seem to be stong. You should expect a loan with a term of 10 years, fully amortized, no prepayment penalty, and adjustable rate pricing based on Prime+ a margin. Feel free to contact me for additional details.
Can you do this loan?
John
The SBA guaranteed loan program provides for business acquisition funding. Different lenders have different criteria, but you usually will be required to invest between 10%-20% into the transaction. Seller financing is permitted in a subordinated position. Some industries (gas stations, c-stores, restaurants, for example) are very hard to get financed. Others are easier. Cash flow, personal credit and experience are important factors--from your post, these seem to be stong. You should expect a loan with a term of 10 years, fully amortized, no prepayment penalty, and adjustable rate pricing based on Prime+ a margin. Feel free to contact me for additional details.
John
QUOTE(sunny @ Apr 3 2007, 08:00 AM) 
The SBA guaranteed loan program provides for business acquisition funding. Different lenders have different criteria, but you usually will be required to invest between 10%-20% into the transaction. Seller financing is permitted in a subordinated position. Some industries (gas stations, c-stores, restaurants, for example) are very hard to get financed. Others are easier. Cash flow, personal credit and experience are important factors--from your post, these seem to be stong. You should expect a loan with a term of 10 years, fully amortized, no prepayment penalty, and adjustable rate pricing based on Prime+ a margin. Feel free to contact me for additional details.
Hi John;
Why do you need owner financing? lower int rate? I'm asking coz you might be able to get the 70% or more LTV through SBA. Let me know if you need help with this loan. What's the target time for closing?
Regards
Why do you need owner financing? lower int rate? I'm asking coz you might be able to get the 70% or more LTV through SBA. Let me know if you need help with this loan. What's the target time for closing?
Regards
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