Are there any commercial loans for 100% financing. There is a franchise for sale in my area. The absentee owner claims $60,000 NOI, and that $100,000 with owner manager. This is a auto shop for sale at $300.000 without land. The outparcel land woulb an additional $300.000. My credit score is aorund 730, my gross salary is $55,000, i have about $50,000 equity in my home, what should i do? i'd like to purchase business as absentee owner,.

I have never seen a lender provide 100% financing for the purchase of a business. After you get past 75% you can expect to pay substantially more in interest rate and/or to give up some equity {some type of hybrid financing where the lender gets part of the benefits of ownership, think mezzanine}. Also this being an operating business, you are looking at a much faster amortization than real estate {think five or seven years} will the cash flow be enough for that type of amortization?

You can also expect the lender to try to collateralize their loan with something more tangible such as real estate. The fact is that regular business assets {inventory, machinery, equipment} have a liquidation value of cents on the dollar. I would think that the best asset to hold is accounts receivable in the case of liquidation, but even that can be lengthy and costly to collect.

” what should i do?” Besides checking to see if those claims are accurate, I just don’t know how you could pull this off without a substantial equity contribution. Maybe get a partner or two?

My input is limited on this area because frankly most bank lenders will not even look at the deal unless there was more equity and probably the guarantee of the SBA.