Ms SmBusiness:
Congratulations on your opportunity.
Lending institutions / banks will want to see the books of the business that you are planning to buy. Having a proven business model that shows profit and future potential goes much further than submitting a plan based upon speculation.
They may request that you include a business plan if the business has seen a significant decrease in their recent profitability, if you plan on changing the name / concept of the business and if you are at risk of not retaining the current customer base.
In these cases, they may request a paired down business plan to verify that you have a clear vision for the business and for repaying the loan. Additionally, depending on the amount of the loan as it compares to their valuation of the business, they typically will want to see your credit information (scores and history), your liquid assets and collateral to back up the loan.
I would recommend that you seek out a business broker and hopefully one that has experience with buying and selling businesses in the industry of your target purchase. The sellers will need to agree to this (and hopefully will since it will help protect them, too) since they will be responsible for covering a majority of the fees. The business broker will be able to walk you through the appropriate paperwork and should have some good connections with lenders. Plus, if they have experience in your industry, they can give you their professional opinion as to the viability of the business' future success as well as a fair market price.
If the sellers don't agree to working through a business broker, they may be willing to do a seller carry back as Luckiest was suggesting. Make sure that you have a solid agreement in place. I would recommend a lawyer / business broker depending on what is customary in your area.
Hope this helps.
Doug Dolan
The Solopreneur's Guide
