Napkin Numbers Basics
It's Deb here, your go-to business buyers' ally in navigating the complex world of business acquisitions. Today, let's unravel the "napkin number basics" for acquiring a proven, profitable small business, including real estate, in a bustling metropolitan area, priced at $800,000.
Understanding the financial groundwork is crucial, and I’m here to make it crystal clear for you.
The Foundation: Your Down Payment
Embarking on this journey requires a solid financial foundation, starting with an $80,000 down payment, which represents 10% of the total price. But here's a game-changer: negotiating a seller note. You can potentially reduce your upfront cash requirement by having the seller carry back 5% ($40,000) as a seller note, easing your initial financial burden.
Creative Financing Solutions
To gather your down payment, consider these avenues:
Cash: Tap into your savings, the most straightforward approach.
Seller Note: Seller agrees to carry back a set dollar amount on paper.
Love Money: Seek a financial gift from family, with no strings attached.
Home Equity: Utilize the equity from your home for extra funds.
ROBS: A rollover for business startups allows you to use retirement funds without penalties.
Investors: Find someone who believes in your vision and is willing to contribute financially.
Asset Sales: Liquidate personal or business assets to raise fund
Need a Proof of Funds Letter? Book an Appointment with Deb today!
Post-Loan-Closing Liquidity: The Safety Net
After securing the loan and closing the deal, it’s essential to maintain a safety net of personal cash savings. Think of it as Grandma’s advice: always have a rainy day fund. Banks will closely examine your post-closing liquidity to ensure you’re not left financially strained.
Why You Need a Business Acquisition Loan Consultant
Here's where I step in. Navigating the SBA guidelines and finding the right lender is no small feat. With my expertise, we can:
Proof of Funds Letter: Fully-vet business buyers eligibility by providing a prequalification letter with set dollar amount. This is 'speed pass' for buyers to jump to the front of the long business buyers' line.
Vet Business Listings: Review listings with buyers' to provide immediate feedback if indeed bank and SBA eligible.
Vet Various Lenders: Not all banks are created equal. I’ll help you find the one that matches your needs, taking into account their credit policies, efficiency, and approach to loans.
Ensure the Best Loan Structure: My network and knowledge ensure you get the best possible terms for your situation.
Save Time and Stress: I’ll do the heavy lifting, making your journey to business ownership smoother and faster.
Let's Make It Happen
Starting your search with a seasoned consultant like me can dramatically increase your chances of success. I understand the landscape, the players, and the rules of the game. Together, we can navigate this journey, ensuring you're well-equipped to take on the world of business ownership.
Ready to take the first step towards your dream of entrepreneurship through acquisition (ETA)? Let’s talk. With the right strategy and a little bit of creativity, your entrepreneurial dreams are well within reach. Let's turn those dreams into reality, together.
Dreaming big, planning smart, and acting with confidence will pave your way to success. Reach out, and let’s embark on this exciting journey together.
-Deb
#entrepreneurship #businessbuyers #sba #eta #businessbrokers
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