hey there everyone. hope everyone had a great new years. i have a question that somewhat has to deal w/ realestate. i found a local business that is for sale(only inventory and merchandise, the location is a rental) that i am highly interested in purchasing for some solid cash flow. the problem is, i really dont know about how to pursue this goal. i have been doing some research on small business loans, but have come up short of the answers that i need. i am curious to know if i would have to come up a certain percentage or if i could obtain the loan @ 100%? if not, is it possible that i can use the equity in my home as collateral? the owner is asking $87,000 for the inventory and merchandise. i have reviewed the companies profile since the birth of the company, and the cash flow seems very promising. any help would be greatly appreciated. thanks
Hi Ninepoint5,
Being a business owner is very rewarding and challenging. I would suggest that before you think of buying a business, no matter how successful the prior owner has been in running it, you search very hard inside yourself to make sure you really want to do that.
Inventory and merchandise are one thing, managing every facet of a business to make payroll and rent and all the other expenses, not to even mention a profit, month after month is something very different.
Labor will be your most challenging obstacle. Knowing what employees need to do for your business and then getting them to do it in the manner needed for success is very difficult.
Real estate on the other hand, doesn’t slack at its desk, doesn’t spend half the day on the internet looking for the best air fare to Cabo, doesn’t call in sick when the sun is shining, doesn’t b.s. you in an interview about how great it is and what it can do for your business. And it never files for unemployment when you fire it.
Hope this helps. Good luck! 8)
Cate
thanks for the info…but the business that im looking into doesnt seem like its rocket science. its a tanning salon w/ 11 beds and a couple of employees. i just need 2 know about sba loans and how about to get approved for one. thanks
It’s also not rocket science to go to Google and look up “SBA loans”. Be prepared for a long slow process with the SBA. You’ll need a well-documented Business Plan.
hey there WIZ…well i spent all day sunday searching on google and any and everywhere else that i could. came up w/ alot of unanswered questions though… so the process of the loan itself is time comsuming? if so, then i maybe outta luck if some 1 jumps on it before i. thanks for the response.
Ninepoint5:
Look around or ask in your neighborhood for SBA affilliate banks. Go in and sit down with a banker.
I think you’d be hard pressed to find a banker that won’t answer any and all questions you might have.