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    0 Replies Latest reply on Jun 24, 2008 9:47 PM by Watchful

    No Shortage

    Watchful Newbie

      I'm a group home daycare owner (16 children) that is planning to purchase an existing daycare center (32 children) for $525K. This is a merger-acquisition. I have secured a commitment for SBA funding. The bank initially proposed funding $495, with my downpayment of 50K. This included the purchase price and associated SBA and bank fees. My $50K was being funded using $35K seller financing and $15K personal investment. After it progressed from the bank's proposal to their commitment, when the bank submitted their commitment letter they dropped it to $425K, which they said was based upon my limited cash reserves, should any major repairs be necessary.

      They wanted me to ask the seller to pick up the additional $75K in the $35K they were already financing. So that meant they would go from $35 to $110. The last correspondence from the seller's attorney suggested that they were not willing to do the entire $110, but were still willing to do the $35. Based on that, there is a $75K financing gap. Any suggestions as to how the financing gap can be resolved? We're so close!! Business cash flow is more than adequate. Our debt service coverage ratio is 1.41. I expect no shortage.