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    Default Loan for a business

    I wasn't sure where to put this but I'm wondering how business loans work. And what chances are for a single mom to get one. I'm looking to buy an existing business.

    Any information would be appreciated

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    I think the big thing they will look at is you being able to service the loan, what income do you have currently, are you working or not working, how much your general living expenses are each month, ie rent, food, electric etc.

    Then there is what type of business is the loan for, what type of income/sales has it generated in the last couple of years. Is it a work from home/franchise/shop front. With a franchise there will be an going % you'll have to pay and with a shop front you'll have all the same bills you'd expect from renting a house

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    yep

    if its for an existing business you will need 3 yrs of cash flow and accounts/tax returns. You will need to prove that you can service the loan etc. Also they will usually want some kind of security - either a personal guarantee (backed by assets), a mortgage or lien over business assets or some other kind of security.

    Business loans also have a higher interest rate than home loans.

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    Thanks you, still sounds rather complicated. My boss wants to retire in about 2 years and offered fit on of us employees to buy the business otherwise he's winding it down.

    It's very successful with a steady cash flow and I'm really tempted

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    Sounds like a good opportunity!

    Any reason why he'd chose to wind it down rather than to sell to other parties than employees?
    For such a successful business he could make a good profit out the sale.

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    The goodwill of business is more attached to relationship with existing clients. I don't know why he's not selling but I'm guessing it would be difficult to maintain with a quick sale.

    He doesn't want to sell it to bigger company and want it to stay a boutique practice, from perspective of clients.

    This is all my opinion, I wanted to arrange a meeting with him to find out more about it maybe in a week or 2 and discuss it, I guess wanted to workout my options and see if I can actually acquire it.

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    Could you speak to an accountant? Or a broker? Do you have access to the latest financial statements of the company?

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    Quote Originally Posted by ExcuseMyFrench View Post
    Could you speak to an accountant? Or a broker? Do you have access to the latest financial statements of the company?
    I do have access, didn't think of that, will contact one Monday


 

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