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    2 Replies Latest reply on Aug 22, 2009 3:43 PM by LUCKIEST

    Need Help in Purchasing a business with no $

    Gary0729 Newbie
      Hello,
      New to the forum.
      I have read many of the threads posted here and feel that I am not alone in my desire to own my own business. I have been working in the same industry for many years and at the same company for the last several. But I have been watching my current company go down the tubes. It has reached panic mode.
      we have less than half the people we started with, but are now trying to do double the work. we all have been living on 30 and 40% pay cuts for the last 18 months. I have given blood sweat and tears and have nothing more to give.

      To this end I have been looking for something for me to do. If I am going to give it all, I want it to count for me. I have the experience, drive and determination to run my own. I have recently found a posting for a company for sale, in the same industry I am in. I know the business and know how to run a business like this. But I have no money.

      The business I am looking at is importing product from China and selling it internationally. The company has an established brand, and is currently trending up every year for the past 5 years.
      They have a niche of the market and have great potential growth because of it.

      The business is being listed for $650K, and the seller is willing to finance half.
      what is the typical pay back for a loan?
      Will I need to secure more financing for financing stock?
      How does a investment work, time frames, expected interest rates?
      What are the best sources for capitol, banks, angel investors, VC firms?
      I am getting ready to look at the company financial's, what do I look for?

      I would be relocating the business across the country, what pitfalls will come from that?
      what can I expect as help from the current owner?
      What help can I expect from the current team members?

      What other areas should I be looking into for this?

      I need any and all help.
      Thank you.
        • Re: Need Help in Purchasing a business with no $
          phanio Pioneer

          To answer some of your questions:

           


          The business is being listed for $650K, and the seller is willing to finance half.

           


          Glad to see the owner is willing to back the company - that is a solid sign.

           


          What is the typical pay back for a loan?

           


          Really depends on the loan. Most loans are based on the useful life of the asset. For commercial property which has a long useful life - this could be 20 or 25 years. For equipment that has a shorter life - it could be 60 months. For unsecured funding - one year to three years.

           

          Also, keep in mind that most business loans are based on balloon payments. The lender may amortize the loan for say 10 years but only set the payments for three years. At the end of the there years, you either have to pay off the balance or re-finance.

           


          Will I need to secure more financing for financing stock?

           


          May not be an option unless you can find private investors.

           


          How does a investment work, time frames, expected interest rates?

           


          All of this is based on the past cash flow of the business and what you think you can do with it. Remember, all things are negotiable.

           


          What are the best sources for capitol, banks, angel investors, VC firms?

           


          Given that the current owner is willing to hold half the note, you might want to try a bank or SBA loan - most traditional financial institutions really like these kinds of deals.

           


          I am getting ready to look at the company financial's, what do I look for?

           


          Take them to a CPA - this will protect you in the long run. But, the idea is to look at profits - if it is not making profits (enough to service the funding you are seeking and the growth that you want) it may not be a good deal. Might even take the financials to a SBDC and go over them there.

          what can I expect as help from the current owner?

           


          This should be outlined in the deal you sign with the current order. Put it all in writing - thus you can hold them to it.

          Business Money Today
          www.BusinessMoneyToday.com
          • Re: Need Help in Purchasing a business with no $
            LUCKIEST Guide
            Need Help in Purchasing a business, Welcome

            If you Need Help in Purchasing a business and want to raise the money, I need to read a Business Plan.

            Talk to me,
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