I watch a guy who talks financials and the SLOOS(senior loan officer opinion survey). He says this survey shows bank loan standards are way high right now. It is near impossible to get a loan of any type even with perfect credit and the best business plan along with a proven winning business. Good luck. YMMV.
this post was submitted on 16 Nov 2023
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Thank you for reaching out with your inquiry about purchasing a large business. I appreciate your interest and am eager to assist you in navigating this important decision. Below, I've addressed your concerns and provided a roadmap for moving forward:
Initial Steps in Business Purchase:
Begin by conducting thorough due diligence on potential businesses. Evaluate their financial health, market position, and growth potential.
Seek professional advice from business brokers, financial advisors, and legal experts to ensure a comprehensive understanding of the business landscape.
Financing Options:
Explore various financing options beyond leveraging your house. Consider traditional bank loans, Small Business Administration (SBA) loans, or even seeking investors/partnerships.
Assess the financial implications and risks associated with each financing option to make an informed decision.
Pros and Cons of Leveraging Personal Assets:
While leveraging your house may provide immediate funds, carefully weigh the risks involved, such as potential impact on personal finances and property.
Compare this option with alternative financing methods to determine the most suitable approach for your specific situation.
Negotiation and Finalization:
Engage in negotiations with the seller based on your due diligence findings.
Work with legal professionals to ensure a smooth and legally sound transaction.
I hope this breakdown provides clarity on the steps involved in purchasing a business. Feel free to reach out if you have any further questions or if you'd like more detailed assistance at any stage of the process.
Best regards,
All source-of-money is 2 categories: Equity or Debt.
Debt: SBA loan would be most typical; one of our (marketing) clients: FremontFunding.com does SBA loans.
Equity: Give up some upside, but no payments directly, no debt-load; spreads risk but limits upside.
Syndication is common.
There's a ton of people lately talking about buying these businesses for zero money out of pocket, but that too carries a cost in one way or another - either increased debt load, or sharing equity.
For any of you crazy finance guys who wanna talk debentures, convertible debt etc I know there are hybrids, but loosely, it's all one or the other: equity or debt.
Debt is easy IF there's a history of cash flow AND some collateral (i.e. real estate, assets). No assets? no history? no cash flow? no loan, unless you have great credit, then it's smaller i.e. $150k "credit card stacking" etc. (thought that can work, and often have 0% teasers).
Illuminati?