$300k small business loan... Pipe dream or possible?
I have a golden opportunity to buy an existing profitable business, the owner is moving to be closer to family, and doesn't want to sell to just anyone. I don't have bad credit, but I don't have much established credit either. I'm in grad school right now for an MBA and want to pounce on this chance. I have managed to pay off my undergrad student loans that were in my name already, so that should count for something right? I don't know if the SBA would even think about loaning me my half in order to make the deal happen (I'd be going in 50/50 with a partner). I won't say what the business is, but I/we do have experience in the industry, and like I said, I'm going for an MBA, so it's not like we're two bums off the street starting up something from scratch. It's more like two guys who already know what they're doing continuing to run an existing and profitable business. Possible, or pipe dream? (I know, $300,000 is a LOT of money)
Public Comments
- SBA programs constantly change. My suggestion is to look for banks where you live who do SBA loans. Just do a search for "sba loans city,state" Then, call and speak with the staff member at the bank who can better advise you what documentation is needed as well as the terms and conditions. There's a fair amount of paperwork involved but could be worth it. good luck
- Possible IF : - you have adequate collateral - you have equity investment of at least 20% (banks and SBA will not give you 100%) - you can prove that you are knowledgeable about the business; or if you have no experience you have someone on board who knows what this business is Understand that banks (and SBA) only want one thing: how to get back the money they loaned you. If you do not have a long credit history, it will be hard for financial instititions to gauge your capacity to repay them. So they may require steeper collateral or higher investment on your part SBA courses their loans through commercial banks - they merely guarantee the loan. So approval depends on the loan criteria of banks. You may write a great business plan BUT if you do not have collateral, no money for equity investment, banks will not even bother to read your business plan. I suggest you read SBA's criteria for financing and see whether you have what they need http://www.sba.gov/services/financialassistance/sbaloantopics/index.html
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