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    3 Replies Latest reply on May 3, 2016 2:29 PM by white1889

    How to buy an existing business with no money down

    white1889 Newbie

      Hi! I have worked in the resturant bussiness for more than 15 years.  I have doen everything from hostess to prep to managing the kitchen and managing wait staff.  Recently the owner of the restaurant that I worked at for many years asked if i would be interested in buying it.  I would love to own/run the restruant!!! I just have one problem... NO MONEY DOWN!  The business is very profitable.  It has been in business for more than 25 years.  Does anyone have any advice on getting a loan with no money down?  Is it possible to use the business as collateral for getting a loan?

        • Re: How to buy an existing business with no money down
          LUCKIEST Guide

          Welcome to the Community.

          Let me tell you how I started one of my business (and also advised others).

          Try buying the business from the owners with notes.

          You need a lawyer and a contract.

          The notes are like monthly payments to the bank.

          The benefits to the owners are that they will receive monthly income

          until the purchase price is paid off.

          Talk to the owner of the restaurant, talk to your lawyer,

          talk to your banker and maybe even SCORE.


          Good luck, LUCKIEST

          and let us know how you make out.

          • Re: How to buy an existing business with no money down
            Moderator Rebecca Guide

            Hi, white1889, welcome to our community!   One of the first things that you will need is a business plan, even though the business is already up and running you'll want a business plan to show how you intend to protect and grow any investment that someone else may make on your behalf.  If you're not sure how to start on a business plan, we've got a great guide that you will find helpful: Guide: How to develop a business plan


            LUCKIEST also has a good idea, in that you may wish to discuss a "lease to own" type of arrangement with the current owner.  Of course, in addition to your business plan, you would certainly want to consult with an attorney before proceeding.


            I'd also recommend getting in touch with someone at the Small Business Association ( or S.C.O.R.E. (  Both of these organizations have a lot of great info about grants and loans that you may not know about.


            Please keep in touch with us, and let us know how your journey progresses.  Also, feel free to browse the articles and discussions on this site, as you will surely find some additional great advice and experiences.  Be sure to ask questions if you have them.  Our great members love to help!




            • Re: How to buy an existing business with no money down
              kiranpatel Adventurer


              I think if you don't have any cash of your own to invest, it would be very difficult to raise capital via bank loans or even SBA. But there are couple of options.

              1. Like Luckiest mentioned, ask the seller to finance purchase price. They know you and you know the business. So it should be easier for them to justify carrying paper. There very little down side for you but for the seller it can be risky (because if you were to default, they have to step back in to run the business which they may not want to).

              2. If seller are not hurting for money or don't need to get cashed out, perhaps you can offer to become their managing partner and build up "sweat equity" in business over time. This way, you own the business you always wanted to own, they get to keep the ownership without having to actually run it AND continue their revenue stream.

              3. Create your own investment group with friends or family. But like I said, unless you are able or willing to put your money in, it would be difficult to convince anybody else to invest.


              No matter which approach you take, make sure to have a CPA look at the financials and advise you on whether or not this is a good buy and what (in CPA's opinion) is value of business.


              Good Luck!