This is my first post. Please be easy on me. I am looking at purchasing an existing business. Its well established, has been around since 1977, its gross averages about 700k a year w/70k to 100k cash flow depending on the year you look at. My credit is above 750 and I can use the equity in my home for cash down. I sent the tax docs to CIT, and the person who I was talking to never called me back. After multiple calls I found out that she was no longer employed by them. My paper work was found and in minutes the confused, unmotivated person reviewed the docs and said no way. After 2 more calls to this person and each call they had to find my docs, I asked them to send the docs back to me. This person did not review the docs for more than 60 seconds and said "I dont see it, its not gonna work". I have done my research and believe the business to be worth in a range of 240k to 300k. The owner is asking 450k which is way too much, but he can ask all he wants. I believe the owner might accept a 300k offer. My question is what does a lender want in the way of cash flow to loan size? What would a monthly loan payment be for a business loan? The business is the same industry as I have been working in for 17 years. I can easily step this business up a notch and do more. Maybe this business wont jive with a lender but it would be nice to know what they like so I dont have the doors shut so fast on me.
Thanks for any input and reading my post!

hello are you still looking for funding?

There are many financingoptions to buy a business. If you are to purchase a business withour real estate then you need to a company that offers business aquisition loans ( no real estate) if there is real estate involved, then the property may qualify for conventional financing. If you need help securing either types of loan, I would be more than happy to help you do so or answer any questions you may have.

What type of business are you purchasing? What assets are you actually purchasing? I assume you are not purchasing any real estate for that price but are you getting equipment, vehicles, customer lists etc...? The type of collateral for this will make a difference as to the banks comfort level. Most deals of this type that don't involve real estate end up with a collateral shortfall. The trick is to ask yourself "If I had to sell all the business assets in a liquidation scenario, what would I get in cash? If the equity in your home and the liquidation value of the assets do not equal the loan amount you are looking for than you may need to look for an SBA guaranty which helps mitigate collateral shortfalls. Also, what is your personal debt level and does the cash flow from the business you mention above include an owner's salary? If not you must subtract out any amount you will need to live. Also, Try a local bank rather than one of the large regional or superregionals lik CIT. You'll see they are typically more responsive and easier to deal with.

Regards,

Brinn