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    2 Replies Latest reply on Aug 25, 2009 8:39 AM by sadie1971

    Purchasing or renting building for new business?

    sadie1971 Newbie
      I am currently researching my options in starting a business. I am in progress of my business plan, however, I keep running into questions that I am having a hard time getting the answers that I need.
      The business that I want is a Breakfast Cafe in my area. It is in a historic neighborhood within a new developments and restaurants, lofts, condo's and gift shops and antique shops. This neighborhood is a very cultural and wealthy area. It is also near our downtown businesses.
      The building that I am interested in is in the area of this development. I currently work at a successful restaurant across the street from this building. It has been for lease for about six months now. It is perfect for what I have in mind. Another business across the street is a grocery/ deli and wine shop. I worked there a few years ago for 3 years. During that time they served breakfast and lunch. A few months ago they decided to stop breakfast due to there catering business, exploding. Of course the owners weren't happy about the cut of revenue but had to make this decision. The neighborhood is in a lost. There is no other local breakfast cafe's in our town. Except for one that most aren't to crazy about. Fast foods and Corporate that's it. I listen to my customers at work and my friends and neighbors, the demand is high.
      The business that is for lease used to be a drop of cleaners that had been there for years. The condition of the building is need of a quiet a bit of renovation. The owner will not charge any rent until we are ready for business. The rent is very inexpensive for this area. However, the renovation will cost us a good penny.
      My question,if we could get a great deal and buy this building would that give us equity enough for a loan?
      For example we bought it for 70,000 but it appraises for 150,000. I am sure that the property alone is worth it. The building alone I'm not sure. With hard work and renovation it will definately be worth its value.
      A breakfast cafe or any restaurant start up is a hard business to get a loan for, but with my idea and a great business plan to back me up. What are my chances? This building is around 100 years old and it is worth having.
      I also have other ways to bring revenue into the business to make this profitable. This will be well addressed in my business plan.
      What kind of loan would I need to seek for this kind of proposal?