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re: Advice on purchasing a business with a loan
Posted on 2/10/18 at 1:45 am to Rossberg02
Posted on 2/10/18 at 1:45 am to Rossberg02
100K investment with a 30K profit is a banging deal.
It might be tough getting an 80K loan for a business that showed a net loss on paper.
Bank will offer you an 80K loan and you will likely need an additional 6 months of capital reserved to pay the loan.
80K at 5.5% 10yrs(+closing) is roughly $1K/month.
Bank will want to see you with at least $2K of personal income left after all your personal expenses to make sure you're capable of paying the loan in case the business generates zero profit.
If not you will need someone to cosign and collateral liquid assets(saving acct, investment acct, etc.)
Starting point, you'll need @30K cash. If not, no loan. JMO.
Just my personal experience with a recent business loan application.
It might be tough getting an 80K loan for a business that showed a net loss on paper.
Bank will offer you an 80K loan and you will likely need an additional 6 months of capital reserved to pay the loan.
80K at 5.5% 10yrs(+closing) is roughly $1K/month.
Bank will want to see you with at least $2K of personal income left after all your personal expenses to make sure you're capable of paying the loan in case the business generates zero profit.
If not you will need someone to cosign and collateral liquid assets(saving acct, investment acct, etc.)
Starting point, you'll need @30K cash. If not, no loan. JMO.
Just my personal experience with a recent business loan application.
This post was edited on 2/10/18 at 2:02 am
1
Posted on 2/10/18 at 1:07 pm to lsu xman
I have savings, retirement, investments, and another very, very small business that is owned and paid for. I hope that will help with acquiring a loan.
Owner financing scares me as to the guy basically owns the business until I pay him off. Would it be best to increase the loan length, the interest, and a lower note but pay him off sooner or keep the terms short with a low interest and high monthly note?
Owner financing scares me as to the guy basically owns the business until I pay him off. Would it be best to increase the loan length, the interest, and a lower note but pay him off sooner or keep the terms short with a low interest and high monthly note?
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