Post a new topic
    9 Replies Latest reply on Jan 10, 2012 1:00 PM by cake23us

    What to do next?

    cake23us Adventurer

      Hello All,

       

      I am new here and need a bit of expert advise in reference to buying an existing business. I have an opportunity to buy an existing business but I am a little weary about financing.

       

      The business is ready to sale ASAP, but does not want to provide me any financial records and second does not want me to try to get a small business loan to cover the cost $45,000.  I have never owned a business before and I am not sure what the process is.  If I do not purchase this business I defenitely want to purchase another business within the area I live in.

       

      What are your thoughts about financing? Should I try for a SBA  /  Patriot Express loan with a local bank or credit union?

      Do I need collateral?

       

      Thanks for your help

        • Re: What to do next?
          CorpCons08 Ranger

          Renee,

           

          If the seller is unwilling to show you financial records, this is a warning sign and you should heed the warning. The reason they are discouraging you from trying to get a small business loan is because they will require the financial records to be reviewed. My advice is to look for another business opportunity, or seek out a consultant who can help with negotiating a successful business purchase.

           

          Regards,

           

          Dan

          1 of 1 people found this helpful
          • Re: What to do next?
            chris1985 Tracker

            I posted this yesterday and it got deleted but here it goes again. I work in the SBA department of a bank, and if you go the SBA route you will most likely need collateral and an equity injection of your own. However, if the owner does not want to provide financials I would walk (or run) away. That is very shady. Also, if I was lending to you, I (representing the bank) would want to see the last 3 years of the business financials anyways, so it makes no sense that he wouldn't let you see the financials. Maybe that is why he wants you to stay away from an SBA loan so he wouldn't have to provide those, but a traditional lender at our bank would still want to see some sort of financials from the seller. Good luck and be careful.

              • Re: What to do next?
                cake23us Adventurer

                Thank you for answering my questions. I honestly felt it was very unprofessional as well.

                 

                I have finished my own business plan just in case, I was unable to find a business for sale. Do I necessarily need collateral ( equity in a home) to apply for the Patriot Express Loan? What other options do I have if I do not have collateral? What about owner financing?

              • Re: What to do next?
                Navigator

                I would have to concur with the consensus. If it seems too good to be true, it most likely is and anyone who doesn't want to share their financials with a prospective buyer or a financial institution is either A. Very disorganized and has not kept anything useful in all of those years or B. doing something illegal such as cooking the books or not filing taxes/claiming income.

                 

                 

                Don't walk away form this deal ... RUN from it. Other opportunities will arise so just be patient and look for the right one.

                 

                 

                 

                All the best,

                ~Moni

                1 of 1 people found this helpful
                • Re: What to do next?
                  Abdul Ahad Afzalzada Wayfarer

                  In term of buying a business its very important to know how profitable the business, What is the daily, weekly, monthly and annual sale.

                  There are some reasons that why a business owner want to sell his business. First either he is bored with doing the same job all the time or he is not making reasonable profit in his business or a competitor opened a new similar business in the area. If you want to buy a business, its very important that the business should have the potential of growth.

                   

                  Let me make it very simple and clear, to buy an existence business or open a new business. Its very important to know the population of the people living around your shop. There monthly income, demands of the people in term of your products, culture of the people and age range of the people.

                   

                  Its really hard job but let me be honest in the recession time businesses are closing down everyday. One business is profitable in one location and the same type of business cant make the same profit in another location.

                   

                  More than all these points you should have faith on yourselve. Nothing is impossible all you need is hard work.

                  • Re: What to do next?
                    Erik Salmon Scout

                    I would second that, you should probably run from this deal. It sounds suspicious. If you are looking to buy an existing business I would start with a reputable business broker. You can also pull information on the business from D&B at dnb.com Good Luck.