Summary: You want to form a "new" business, with no assets or business history, to purchase an existing business. You then want to use that existing businesses assets and business history to finance the loan being requested by your "new" business. Am I reading into this correctly?
Turbo, you raise more questions that need to be addressed before we can give you good answers.
Question 1, Do you have an accountant?? The accountant should know your 3 year old business
and would be a good person to ask about this second business.
Question 2. WHAT NOTE??
Again your accountant should give you good advice on combining the two companies.
Corp: I read it like this - Three years ago Turbo started a business that is still afloat but it is not producing enough returns/assets to allow them to purchase an existing business that is currently in trouble. I believe Turbo is asking if the business he wants to purchase can act as its own collateral, however, I am not sure which note he wants to pay off or what time frame he is talking about.
Turbo: Could you provide some clarification and further information for the community. The more detail you can give, the more detailed of a response you can get!
You can do this, but you need to have the consent and cooperation of the seller.
It's called seller financing.
To go to a bank, they would have to see a significan't cash downpayment to use the purchased business as collateral.
Yes seller financing seem to be the way Im looking to go here!
I hope they would be willing or open to a merge.
I will some debt and my lease runs out in two years so im hoping to either grow rapidly and can afford to buy someone else or they would buy us, either way i would be nice to get a vacation and not have everything rely soley on my efforts alone to keep things running
In case they're not open to seller financing at first...
You may be able to get them interested by offering them more than their proposed sales price in exchange for financing the business over time.
I hope this helps.
We wish to buy a business in the next 3 months the owner is in a jam.
I just started a business 3 years ago at the start of the reccession and while we are still afloat it's hard to see the growth, i.e. profits i.e. we dont have extra cash to buy this new business
can I use the new purchase "business" to act as it's own collateral and pay off the note.
Then combine the two companies, gain it's assetts.