Business Or Real Estate Acquisitions – Without A Bank Loan!
Are you trying to buy or sell a business or medical practice that doesn’t qualify for SBA or traditional financing?
Do you want to purchase a business but you don’t have great credit? Tough getting financing?
Or do you have a situation where a deal might work but the seller is worried about holding a seller note?
Is there a deal where there is a buy-in? buy-out?
Replace a partner?
Partnerships? Partner adversity?
There are specialized, thorough agreements that protect both the buyer and seller in a business acquisition, buy-out, buy-in, business investment, or to solve an adversarial partnership.
-Typically the project can be paid off in 7-8 years versus a 10 year loan.
-Interest rates typically can be 5-7%
-Ongoing consulting, advice and help to succeed” works with bank financing or when only seller financing works.
-Design a ‘forever contract’ with special mutually-agreed upon terms.
-Fees typically less than a SBA loan, and other traditional financing.
-CPA expertise
-Possible tax savings
Good for sellers/owners:
-Sell the business in a way that suits the sellers’ needs.
-It protects the seller because the payments can never be delinquent
-Earn on-going residual income for many years with or without working in your business
-Wind-down while selling
-Having an independent business person is better than an employee in many ways
-Get maximum value for the business
-Protection if the buyer fails or has difficulty (not the case with a bank loan)
-Earn interest income
-Seller may get more money vs. a bank loan
Good for buyers/investors:
If business is better and income is up, it may be able to be paid off sooner,
Earn income directly related to your efforts in increasing business revenue and reducing expenses
Earn business equity by meeting contractual goals
Investment can be small
Become an investor in a company without working in it” like an investment property” passive income
Not have administrative burden of paying bills
Buyer controls sales and income
Buyer can lower tax bracket by being allowed to expense perks legitimately
Business and marketing support are available to you for business growth” experienced business people will educate buyers to improve customer care and how to increase revenues
Buyers with bad credit or lack of funds can still make the deal happen
EXAMPLES of How this might work…
A younger person comes out of college and doesn’t have a full resume yet, doesn’t have a big down payment, and perhaps the credit report isn’t ideal. But he/she wants to buy an existing business – and probably can’t get bank financing with any one of those issues.
A business has been doing well for years but has one or two years of a downtrend, it isn’t doing as well as it used to do the economy but it is still strong and is viable. The seller wants to get out and retire but the bank won’t finance with a downtrend.
A business owner likes certain parts of the business and enjoys doing them almost like a hobby but doesn’t want the headaches of running the administrative, operational things. The owners wants to continue to earn some money but doesn’t need as much. There are buyers or individuals that would love to be able to get into a business with little or no money down, earn equity, and have a mentor on board.
An investor can own a business that he/she has never seen, visited or run and collect passive income, almost like an investment real estate property.
So you see there are flexible options that protect both parties and allow deals to be completed that were once unable to be considered.
Jim Frey is a former VP of a billion dollar bank and now a commercial loan broker, speaker, author. Jim enjoys helping entrepreneurs find alternative ways to finance their projects. Get his ebook at http://www.doughforthedream.com or listen to podcasts at http://www.doughforthedream.podomatic.com
Most of the services reviewed by this website are available or may be accessed from Australia (see 