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2669 Views 6 Replies Latest reply: Jan 31, 2012 7:12 PM by David Hill
Newbie
cici52
Currently Being Moderated

Jan 10, 2011 9:45 PM

need financing for existing business

I am looking to buy  a profitable Bed and Breafast. I have about 8,000 in the bank.  We lost our home 5 years ago because my husband lost his job so we have no equity. The owner of this business is willing to finance for 10 years if i could come up with 30-40,000 dolllars. Have only talked to a couple of banks but they won't loan money for a down payment. I know I can increase the profit of this business. I have so many ideas , but am lost as to where to find the money to make it happen. Any help or ideas would help.   marti

  • LUCKIEST Master
    LUCKIEST
    Currently Being Moderated
    Jan 12, 2011 9:24 AM (in response to cici52)
    Re: need financing for existing business

    I could have a solution for you..  Please provide contact info.

     

     

    • David Hill Novice
      David Hill
      Currently Being Moderated
      Jan 31, 2012 7:12 PM (in response to LUCKIEST)
      Re: need financing for existing business

      LUCKIEST, were you able to find a solution for Marti?  I am in pretty much the same position. 

       

      I have negotiated the price down to $80,000.  And, the owner/seller is willing to finanace half of the $80K purchase price @ 6% interest for 4 years.  Seems fair but I would just as soon take them out completely and borrow a little extra for legal expenses and a couple of improvements / repairs.  Do you think this latter idea is a good idea... or should I just find the $40K I'd need to do do the deal that keeps the owner/seller in the deal for 4 years?  ~  Not sure which way is wisest, the easiest, or the most cost effective...???   Any advice would be appreciated. 

       

      The business I want to buy is under-priced and doing okay... and in a phenominal location!   But it has room for improvement.  This restaurant has been operated by an absentee owner due to serious health issues.  Thus they want out ASAP.  ~  Note: I have built and help start many bars and restaurants... and I have run other businesses for 28 years.  I will be a hands-on owner / operator.  --David

       

      PS:  I would like to know if Marti had success in her quest (?).   - - -    Plus, if anyone else has suggestions or advice I would be appreciate it.

       

       

  • Newbie
    Ben Snow
    Currently Being Moderated
    Jan 12, 2011 10:21 AM (in response to cici52)
    need financing for existing business

    as a female small business owner there are federal grants at your disposal for start up and what not.

    • Barky Dog Apprentice
      Barky Dog
      Currently Being Moderated
      Jan 12, 2011 10:53 AM (in response to Ben Snow)
      need financing for existing business

      Hi Cici,

       

      Benjamin brought up a very good point.  Ohio does offer a "Minority Direct Loan Program".  As a female business owner, you might qualify.

       

      Here is some more info that I pulled for you. 


      "The Ohio Minority Direct Loan Program grants direct loans to businesses relocating or expanding into Ohio that demonstrate the creation of new jobs. Women business owners are approved for the Minority Direct Loan Program based upon the number of employees hired. Businesses must also demonstrate a need for state assistance. Women business owners must provide a business summary describing the use of funds, the loan amount needed, a request for an interest rate and loan terms, and a list of business collateral. For information on the steps required to apply for the state subsidized Ohio Minority Direct Loan Program, contact The Office of Minority Financial Incentives at 614-644-7708. "

       

      You should also contact your local SCORE office for some free advice and guidance.  You can see the list of SCORE offices here.

       

      Also, the Ohio Small Business Administration (SBA) offers a lot of free help.  You can visit their website here.

       

      Best of luck!

       

      Barky

      1. Ohio Minority Direct Loan Program

      2. The Ohio  Minority Direct Loan Program grants direct loans to businesses relocating or  expanding into Ohio that demonstrate the creation of new jobs. Women  business owners are approved for the Minority Direct Loan Program based upon the  number of employees hired. Businesses must also demonstrate a need for state  assistance. Women business owners must provide a business summary describing the  use of funds, the loan amount needed, a request for an interest rate and loan  terms, and a list of business collateral. For information on the steps required  to apply for the state subsidized Ohio Minority Direct Loan Program, contact The  Office of Minority Financial Incentives at 614-644-7708.
  • PiperE Novice
    PiperE
    Currently Being Moderated
    Jan 13, 2011 1:43 PM (in response to cici52)
    need financing for existing business

    Marti,

     

    Without a substantial down payment from you, not the seller, it is unlikely a bank will finance the purchase. They want to see the buyer have plently of skin in the game.

     

    There is one good option, negotiate with the seller. Depending on how motivated they are to be out of the business, how confident they are in the business and how confident they are in you, you may get them to finance the entire deal. Payments to the seller could then come from the profits. Plus, it may very likely be beneficial for them tax wise. If you don't feel you're a good negotiator, find someone who is.

     

    Of course, you'll have to be very familiar with the the income and expenses of the business so you can be sure there is plently of profit to make payments to the seller and support you, too.

     

    Whatever you do, please do not pay up front for any kind of loan. It is mostly likely a scam and you won't see your loan or your deposit back.

     

    Good luck to you!

    Piper

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