Re: Think like a bank
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The banks around here were basically useless and were a big waste of my time. They would agree that the business is profitable and I knew the business but would not help me at all unless I was willing to put up 100+% collateral against the $200k I needed to borrow. I had no way of coming up with that type of collateral of course. I own my own home but only been in it a couple of years and do not have much equity in it yet.
Luckily I know some people who have plenty of money and they are loaning me a large portion of what I need and current owner is willing to finance the rest for me himself.
So I am officially taking over on April 1st. Its been a long time coming. [img]/images/graemlins/smile.gif[/img]
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In my experience, this is how many many business acquisitions are accomplished. It is way easier to finance the purchase of an existing profitable business than a start-up, so imagine trying to get the bank to give you money for a start-up. But seller financing is very common when buying a business. In fact, the possibility of seller financing is one of the first things I look for when I'm looking for deals. It shows the seller's faith in the business, IMO.
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