Where To Go For Commercial Financing?
Hello,
A partner and I are looking to purchase a small, successfull, local franchise hot dog shop? Could anyone direct me about what type of financing I could get in a situation like this in general? Would I qualify for an SBA loan?
Thanks!!
Chris
Commerical lending departments at your local bank can help you with this. If its to risky for them, that is when a SBA guarantee of the loan may be sought.
Ok...thanks!!!
If you are looking to acquire an existing business, SBA is easier.
[ Edited by commercialking on Date 07/19/2004 ]
For a business acquisition, especially franchise, SBA is the way to go. Best terms and underwriting.
Some local banks will not know how to do these, or recoil from the anticipated paperwork. We rarely use a bank for SBA but broker most of our SBA product to CIT Small Business Lending.
They have excellent service, and their underwriters love us. The website is very good for educating you on the SBA products.
You'll need a small business plan, resume that shows experience in the business, and about 10% down on the transaction. You can even work in some working capital depending on how the loan is structured.
A loan broker can also help grease the skids on the SBA loan app and how to work your numbers. Make sure you have historical financials and tax returns from the business, put together your own forecast, and get together your own personal financial statement and personal tax returns for the last three years.
Keep an eye out for TCI Preferred Lenders. We are revamping the Lenders area specifically for Commercial Investors. You will be able to use our software to find a loan specific for your commercial investing needs.
SBA loans will require a personal guarantee--which means you will potentially putting your home at risk if the business fails. I would suggest you contact business brokers in your area to see what other opportunties are available--you will find that most existing
non-franchise businesses are owner financed w/o a personl guarantee. Try www.bizbuysell.com for listings.
Hope this Helps.
Early on, we did an SBA lo-doc low (low documentation). It was approx. 2 pages of paperwork, along with a basic business plan composed with Microsoft Works.
Took a week to approve.
Best thing is, we paid it off and they are now throwing money at us, although we don't need it now!
-CC