Is it possible to borrow money to purchase land and build a building for a business that you want to open. Restaurant.

The land and building in my mothers name, but the company in my fathers name.She does not want her name on the company.

Thanks, RC

Are you looking to fund this project with you own funds also...what type of loan are you looking for; typically lenders like to see 15-20% of your own funds invested on commercial projects. If that is the case then you will not have a problem finding a lender as long as your financial profile, business plan, projections and experience fit the deal.

Your father wants to run the business in his name and your mom will remain on the deed w/ the father or alone? HOw will you play a role in this?

The amount of equity that will be needed for a project of this type will be considerably higher than 15%.

The fact that we are talking about a startup restaurant, would turn off a lot of lenders. After all, the primary source of repayment for the permanent portion would be cash flow from operations of a "startup restaurant".

If anyone would be interested it would be at no more than 70% loan-to-cost / loan-to-value. This means that if building the restaurant costs $1,000,000 inclusive of land, and your equity contribution in the form of land is $300,000 it might be a doable deal. Otherwise, it is not.

But since you are looking for money to even purchase the land, I would say that it is not possible.


Sorry

I am not sure if we should be too hasty in saying this is not doable. If we considered an SBA program as an owner occupied business then 15-20% would work out ok. Now, to purchase the land w/ a typical construction loan and build the resturant w/out any current cash flow to service debt seems difficult -good point!

Yet, if you did have an existing resturant (or cash flow) and wanted to expand that changes the deal somewhat! Even then there are loans that are ballooned so that interest is due at completion or when refinancing when a portion of the building is complete. Let me see what I can come up with for you. There are many private investors who are looking to fund viable projects. I will be in touch.