Accounting bookkeeping – We provide high quality bookkeeping/accounting services for our US and Canadian based clients from our offshore operations centre in India.
Add comment February 25, 2009
Extended Auto Warranty Avoid surprises and costly auto repairs while protecting your investment with an extended auto warranty.
Add comment February 25, 2009
Financing the Purchase of a Small Business:
Financing the Purchase of a Small Business:
If only I was paid a dime for every buyer that has came to me thinking they can finance a business with no money down….
The truth is and this has absolutely nothing to do with the current financial crisis. You cannot finance a business with no money down. Now before the emails start filling my mailbox up with exceptions please let me explain myself.
Financing a small business requires one of these 2 options: A down payment from the buyer and seller financing for the balance, or a 100% purchase by the buyer with no seller financing. Let’s discuss them in more detail.
Down Payment & Seller Financing:
No seller in their right mind will sell a business without some form of down payment. The buyer must have an equity investment into the business for the seller to feel comfortable financing the balance and more importantly turning the business over to a new owner. Without this equity, the buyer has no exposure and could simply walk away at any time.
The typical down payment on a small business with seller financing will completely vary from deal to deal. The motivation of the seller will play a huge roll in this equation. One seller may accept 20%, another can be as high as 80%. Typically sellers would like to see the down payment close to 50%.
Terms of the Seller Financing Note:
Negotiate with the seller financing so that you are 100% comfortable in being able to cover the debt service out off the income from the business. A good place to start would be to look at a seller note amortized over 5 years (60 months) at 6 or 7% interest. (Use a mortgage calculator or auto calculator at Bankrate.com to calculate the payment) On larger transactions, the financing can spread over possibly 10 years with a balloon payment due in 5 years. A balloon payment means you will be required to pay the balance off on the last payment.
So now that we know a down payment will be required, where and how do we get the money? There are several sources from personal savings, family, friends, private investors, and banks.
Bank financing the down payment or 100% of the Purchase:
If you decide to use a bank for your financing method on the down payment there are a couple key facts to understand. Today banks are requiring buyers to put down a minimum of 15 – 20% down payment. This is money you must come up with to get the loan. In addition, you will need to have experience in the industry or least management experience and a good credit score to even qualify for the loan. Yes, that’s right. You will need to have a good credit score. Next, they will take a very close look at 3 years financial history on the business. If the business does not have strong financial tax records then you need to be considering a personal loan from the bank because a business loan is out of the question.
Personal Loan:
If you have good credit you may be able to qualify for a personal loan from the bank to use as the down payment or purchase. You may have a home you can refinance, a CD to borrow against, or another asset that can help secure the loan.
The Common Misconception from Bankers:
It is very common for bankers that do not specialize in SBA loans to unfortunately mislead buyers into believing they can easily give them a loan. It is not the bankers fault in this; they are just trying to bring in new business to the bank. The truth is very few bankers know anything about buying or financing a business. In my opinion, they just bring the new application in, process the loan and it’s the team of underwriters behind the scene that are the decision makers and who have the restrictions set in place. The best way to find a qualified SBA loan broker is to contact your local Business Broker and ask for their opinion. Business Brokers are an excellent resource for financing.
3 Bank Qualifications Needed for a Small Business Loan:
- Experience
- Cash Down Payment 15%-20%
- 3 years profitable financial history on the business
Negotiate and Make the Deal Work:
Now that you understand the financing structure required to buy a business, contact a local business broker and search for a business for sale that fits your requirements. Once you find that perfect business, have the broker negotiate the financing terms for you with the owner. Remember the Broker has every incentive to get the deal done and they will go to great lengths to make the pricing and terms work.
Questions / Comments:
This article is published by the Business Broker Journal, A business for sale marketplace. If you have any questions or comments on this article please send us an email to blog@businessbrokerjournal.com.
Requests / Advice:
The Business Broker Journal answers 100’s of questions from business buyers and sellers every week. If you have any questions on buying a business send us an email to:
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Add comment February 7, 2009
2 Transmission Franchises–Unique Synergies–Strong Cash Flow Growth
Nation’s #1 Auto Transmission Franchise: 2 Stores with Super Name Recognition These locations are available for purchase together or separately. No transmission or automotive experience is necessary. Sales experience can be helpful; the franchise will support the rest including appropriate systems to make the business work. This is a tremendous opportunity for a new owner who wants to own multiple franchises with the nation’s #1 auto transmission franchise. These locations were previously operated by an owner who began to neglect the business due to other demands on his time and finances. The businesses suffered and they were purchased by the current Owner who has expertise in running this franchise, has streamlined the businesses and created an outstanding opportunity. The Owner has improved the businesses and with attention new buyer will be able to buy an existing operating franchise at a great price. Financial Information is based on pro forma estimates using prior and expected results. The Owner will explain in detail the basis for the pro forma results, and the strong opportunities for growth. Two significant new contracts have been put in place in the last 2 months. Currently other auto services are offered, and the services can easily be expanded, allowing customers to use the stores as one-stop shops for all their auto care needs. By adding just 2 to 3 transmission customers per week, a new owner can add as much as $ 200,000 more to the bottom line. The transmission business is one of the best in the auto care industry. It is low volume, high ticket. As people put off new car purchases, there will be greater demand. Each of the shops is in a high visibility area. Between 20,000 and 30,000 vehicles pass by daily– this in itself adds value (and free marketing) to the business. Purchasing this business brings immediate brand-name recognition and long term profitability.
View More Details on this Business for sale at the Business Broker Journal.
MANUFACTURING: Products and services include engraving duplicate milling, steel stamps, embossing, and coining dies, manufacture of mold cores and cavities and general machining. Located in major Wisconsin city.
View More Details on this Business for sale at the Business Broker Journal.
Ocean Blue Frozen Yogurt Franchise For Sale!
This exciting franchise opportunity is a perfect way to take advantage of an innovative approach to an established and popular market. It’s an opportunity that benefits everyone with the desire to complement a healthy lifestyle with delicious frozen treats. Did you know that the frozen dessert market is expected to grow by more than $4 billion to a total of $27.6 billion by 2012? U.S. yogurt sales have more than doubled, to $5 billion, from 1998 to 2006. That’s where Ocean Blue has separated itself from the competition by using unique and superior products derived from only the highest quality ingredients. Those ingredients ultimately produce an incredibly tasting product second to none in the industry. This outstanding product combined with a rock-solid corporation behind it, makes this highly satisfactory business one that is worth taking a closer look at.
View More Details on this Business for sale at the Business Broker Journal.
Add comment January 14, 2009
RESTAURANT: Fast Food: Sub Shop Franchise – #9521
RESTAURANT: Fast Food: Sub Shop Franchise: This is a fast food restaurant with a proven, popular menu. It is located in a new growing area of Northern Virginia. The store is located in a shopping center built in 2004. It has an appealing, clean appearance that will please many shoppers.
View More Details on this Business for sale at the Business Broker Journal.
Add comment January 13, 2009
Liquor Store / Liquor Wholesale Business / Party Supplies
This is an excellent and well diversified liquor business for sale. The owner started the business 10 years ago and has consistently grown sales. They operate the business completely absentee with well trained employees. Inventory ranges from $180,000 – $300,000 at cost.
View More Details on this Business for sale at the Business Broker Journal.
Add comment January 13, 2009
Oil&Gas Field Equip Distribution & Machine Shop
The company is essentially a supplier of components and equipment used to build, remediate, and upgrade oil and natural gas infrastructure including wells and pipelines. Operating out of multiple Midwestern locations, this company supplies, fabricates, welds and repairs all of the equipment and parts required to build and maintain oil and natural gas wells. This includes pipes, casings, tubing, rods, pumping units, fittings, valves, poly goods (tanks/pipes), customized/refurbished pumping systems, pumping components, and other miscellaneous parts. Thus, the company is both a value-added distributor and machine shop. This company is in a great position to capitalize on many new avenues of growth in the Natural Gas and Oil industries, and has already begun to do so.
View More Details on this Business for sale. at the Business Broker Journal.
Add comment January 13, 2009
Successful, Strong Growth, Commercial Cleaning Co., VA
This long established, very successful construction cleaning services company has served the Northern VA, Washington DC market for over 20 years. With sales of approx. $480,000 (expected $500K for ‘08) and owners cash flow of approx. $108,000 the growth has been consistent and steady.
The company’s services include Construction Cleaning; Model Home Cleaning; Window Washing; Pressure Washing; Carpet restoration; Water Extraction; Mold Mitigation; etc.
The company was one of the first to secure contracts with builders for residential construction clean-up. The company has an excellent reputation, known for its attention to detail, efficient scheduling, and the ability to offer new services at the request of clients.
There is much growth potential in its market. The owner now wishes to retire, therefore the company is reasonably priced at $265,000 with significant financing available for the qualified buyer. All inventory and FF&E is included in the purhcase price. It is easily relocatable to anywhere in its market, or the owner will lease the space it is now in. We look forward to your inquiry.
View More Details on this Business for sale. at the Business Broker Journal.
Add comment January 13, 2009
Our Client represents BMW Motorcycles as a single line franchise. BMW is within the top five brands in the world. The total focus is on retail sales and service of new and pre-owned bikes plus related parts, accessories, apparel, safety equipment, insurance and financing assistance. The subject Company was established in the mid seventies and purchased as a single point franchise by the current owner, our Client, in 1995. Through acquisitions and relocation, the Company now has two exceptional contiguous dealership locations that enjoy brand exclusivity, unrestricted expandability and a substantial competitive advantage. The best purchase candidate should have a management level working knowledge of the marketing and sales of high quality products in addition to a grasp of small business issues and a very strong customer service ethic. A key element to historical growth and no doubt future growth is an unwavering dedication to customer service and equal dedication to the people that work, on, in and for the Company. A pledge has been made to the employees that the new Owner will share that same philosophy. Both dealerships are located within a major metro market that s populated by nearly 3.3 million people. The upper-middle to high-income demographics of the markets served make for a strong following with excellent prospects for growth and many new profit opportunities. The Company consistently operates at the highest level of sales and customer satisfaction and has been a Top 5 or Top 10 dealer for the given brand for over 10 years.
View More Details on this Business for sale. at the Business Broker Journal.
Add comment January 13, 2009
