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    10 Replies Latest reply on Jan 16, 2009 3:08 PM by bmt2008

    Equity/Business Financing Options

    ronlisa Newbie
      To all, I would like to discuss financing recommendations for my small business.

      I was told bank finaincing would likely be 8% amortised over 20 years. and that sounds pretty good, but I would like to know if I have any better financing options. as well as Pro's and Cons for
      1. Bank financing (my accounts are at BOFA)
      2. Private financing
      3. Low interest government loans (I always hear and read about these, but I can't find any info)
      4. other financing ooptions

      Here is some background information....

      I am a partner in a small business in Renton, Wa.
      I also own the building in which the business resides.

      I have reached a tentative ageement to buy out my partners interest in the business.

      I would like to use the buildings equity to finance the business purchase and also consolidate some past operating debt.

      My Building has an existing mortgage with a balance owed of $192,000. The note is privately held, 7% amoritised over 30 years. Two separate commercial agents have recently provided me with a "comparative market analysis", One from $500,000-$550,000 and the second $525,000-$575,000 for the building.

      I would like to pull $200,000 in equity from my building for the partner buyout and to consolidate operating debts. ($100,000 or more of building equity would remain) Current operating debt payments are +/- $5000/month. . The debt consolidation will likely reduce my monthly payments considerably.

      I have excellent credit (over 800 fico score). I have personal assetts to cover the purchase, but do not necessarily want to use my homes equity or retirement of college funds to make this purchase.

      any info or discussion would be helpful ..... Thanks for your time ... Ron
        • Re: Equity/Business Financing Options
          Fortis Adventurer
          There are definate options. Have you talked with anyone in regards to an SBA loan?
          • Re: Equity/Business Financing Options
            LUCKIEST Guide
            Equity/Business Financing Options, Welcome

            It sounds like you are making all the right moves.

            Do you have a Lawyer??, An Accountant??

            Do you know about SCORE> SCORE is FREE and can also help answer your questions.
            You can talk to a SCORE counselor in person or online

              • Re: Equity/Business Financing Options
                ronlisa Newbie
                Thanks for the reply,

                We;ll be using the lawyer who drafted our original contract and Corporation papers, and our accountant, we only see once a year for taxes.. This transaction is between family members, and the books have been reviewed and approved by both parties. We are a very small company and I'm looking for ways to maximize my buildings equity to improve cash flow and Purchase full business ownership?

                I just answered a question about SBA/SCORE hmm, where is it? I still need to figure iout how this forum works.

                Will this message be posted for all to read or only to Luckiest?

              • Re: Equity/Business Financing Options
                nancy.fer1_2 Newbie
                This site is highly informative and it is mainly useful for the bussiness people.I need more information about equity/bussiness financing options means it will be good.


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                • Re: Equity/Business Financing Options
                  NashGG Newbie
                  I think it's better to use your equity funds to finance your buisness.

                  <a href=>Equity Loans</a>
                  • Re: Equity/Business Financing Options
                    bmt2008 Adventurer
                    8% for 20 years sounds pretty good given this economy. Might think about taking it. Then watch rates to see if they fall. If they do, refi. Is the rate fixed or variable? Is it a 20 year term or 5 year balloon payment? This is what will really matter.

                    Your collateral should really help you. Don't be affraid to negotiate with your lender.

                    There are no low interest government loans unless you get bailout funds. The government does have programs that guarantee a portion of the loan amount - but the fees for this are higher - higher then you stated in your follow on post plus, you still have to meet the underwriting of the lender and will have to submit double the info - to the lender and to the guarantor.

                    With you credit, collateral, experience, you should not have any trouble. Go back to your lender and ask for a better rate - they can only say no. Also, if you have time, check out my website it is in my profile I might be able to help. I know of one commercial lender that just got a client of mine a 6.25%, 5 year loan amortized over 25 years. Balloon payment laons are not all that bad - especially if you can get a low fixed rate.

                    Good Luck