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    5 Replies Latest reply on Jun 9, 2009 2:27 PM by Alex07631

    Tired of Killing Myself For Others. Need Financing.

    Alex07631 Wayfarer
      I actually just ran into this topic trolling around the internet and figured...what the hell, might as well give it a shot!

      I am currently an Executive Vice President at a company that is on the brink of collapse.

      I have given my soul to this company and have given money out of my own
      pocket trying to save it...not just me but others also. I am just
      talking about myself.

      Right now, I have 20 million shares worth practially nothing. And the
      business is borderline Chapter 7. I have never worked harder,
      sacrificed more, taken cuts in name it, I did it to try and
      keep this place afloat. Its literally the best job I ever had and that
      is why I did so much to try and save it the last two years.

      In April, I finally threw in the towel. I have no more to give. And I
      told my wife I would never go all out for a company unless its
      something I own. Which brings me to this topic.

      How can I buy a business with no money down? That sounds insane to me
      especially with the way things are in this country right now.

      I have had my eye on a laundromat in Manhattan and its up for sale for about 550k.
      No way I can afford this since I have given so much of my savings to my
      present company. I currently just have about 12k saved.

      But this business is a gold mine. It generates great revenues. Its
      pretty automated. I just have to do some marketing and keep an eye on
      the employees. Thats it. The fundamentals of that business are quite
      strong, I must say. I have reviewed last 3 years tax returns. It clears about 157k. Thats CLEAR meaning all expenses paid. I have spent time there. Looks great. The owner is selling because he is moving back to the Dominican Republic (I am also of Dominican heritage so we have built a good bond.) The prices was 650 and basically he says he wants to sell it to someone from "his country".

      But of course, money talks. I only have about 12k saved.

      He is willing to owner finance. But I have to come up with about half.

      How can I go about doing this? Is it really possible? I have
      IMPECCABLE references that I can submit to anyone that can vouch for my
      character, integrity, work ethic...whatever. They are all from C-Level
      people in the US and in Switzerland. But that and a bag of beans will
      get you squat at a bank when they run your credit and see that in the
      last 18 months, you basically ruined your credit...even though its
      because of my paycuts that I just had to make necessary adjustments so
      that I can hold out hope things would turn around at the firm.

      I would quit tomorrow if I knew I can run something of my own. That
      business can be my ticket back and I am pretty sure it can be the
      stepping stone to other bigger and better things.

      Can you take the tax returns and financials to a bank a secure a loan that way without credit or whatever else? I kinda think this may be of a monumental task especially in the tough times we are in.

      I don't think I can ever sell my soul to corporate America again. It has to be about me going forward.

      Any feedback on this would be greatly appreciated.
        • Re: Tired of Killing Myself For Others. Need Financing.
          ggoodard Adventurer
          Please send an email to me I would like to open a dialogue with you.
          • Re: Tired of Killing Myself For Others. Need Financing.
            wilfin Adventurer
            Alex, just a word of caution. If an individual wants you to email you your plan
            and then asks for a due diligence, don't walk.

            You make some good points and know what you are up against. I wish I
            could be of assistance. There are some legit companies (companies not just
            individuals) that could possibly help you. There's a poster Phanio on here that
            has a good website you might want to check out.

            Best of luck to you.
            • Re: Tired of Killing Myself For Others. Need Financing.
              NoBullFunding Scout
              If your credit is poor, bank or SBA financing will be tough to come by in todays credit market. With any luck, the seller will have no other buyers and he'll need to change his terms to meet the reality of the situation. (In other words, he has to take what you have to put down, or he wont be able to sell the business).

              Couple thoughts:

              1) The $157K will be reduced by the annual debt service for the loan. $550K, 7%, 15yrs will require annual payments of about $60K. That cuts yout take home to $100K right off the bat. I'd factor that into the price you pay.

              2) I would HIGHLY recommend an earnout component of the loan. I've seen many many many people buy businesses, then the business performs worse that under previous management. The idea would be to pay the seller based on future business performance, not just based on past performance. After all, the economy is worse now, so you should not have to pay the seller based on performance during a good economy (if for nothing else, use that point as a negotiating point!) For example, you could agree to a "base price" of $550k. If the business performs the way it has in the last, then you make payments based on the $550k. If the business underperforms, then you make lesser payments based on a predetermined formula. This ensures that you don't overpay.

              If you have any other questions, please email me at Free advice, no strings attached.
              • Re: Tired of Killing Myself For Others. Need Financing.
                phanio Pioneer
                Please visit our website as we provide information and resources for many products that can help you. Plus, why not try to puchase the business you are at now and turn it around?

                Business Money Today
                  • Re: Tired of Killing Myself For Others. Need Financing.
                    Alex07631 Wayfarer
                    Hi Phanio,

                    I went to your site. I have to say its very cluttered with tons of information all over the place! But I will review.

                    As far as buying the business I am at now and turning it around, three points on that:

                    1) There are stock holders from as far back as 1994 that are diluting the stock. I have suggested a reverse stock split (when we were financially able to) to try and remedy this some but was totally rejected by the board where many of these stock holders sit.

                    2) The company has some debt and is having alot of trouble obtaining investments. If I were to buy this company, it will take about 4 million dollars to completely turn it around and headed in the right direction. Though the business plan is solid and the subsidiary the parent company has bought has great potential, there are no takers at this point. In addition, the ONE SOLE INVESTOR has basically agreed to hand us about 80k a month is "investment"...but they are loans, he can call those in at any time. To get him out of the picture would take about 1 million of that 4 million I would need.

                    3) If I could buy the company, why try and raise money to buy a laundromat? ;)