Savvy

When buying a business opportunity that will not include commercial property, borrowers should recognize that business loan options will undoubtedly be significantly different when compared to a business purchase which might be acquired with a commercial property loan. This problematic situation occurs as a result of normal absence of commercial real estate as collateral for the business financing when buying a business opportunity. In terms of arranging the business loan, efforts to buy a small business opportunity are almost always described by commercial borrowers as excessively confusing and difficult.

The comments and suggestions in this report reflect business financing conditions which are frequently offered by substantial lenders willing to give a business loan to buy a business opportunity throughout the majority of the United States. There are likely to be circumstances when a seller will privately fund the acquisition of a small business opportunity, and it is not our intent to address those business loan possibilities in this report.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a HOME BASED BUSINESS – Amount of Business Financing to Anticipate

Business financing conditions to buy a business opportunity will most likely involve a reduced amortization period in comparison to commercial mortgage financing. A maximum term of a decade is typical, and the business loan is likely to require a commercial lease equal to along the loan.

HOME BASED BUSINESS BUSINESS LOAN STRATEGIES:

Expected Interest Rate Costs for Buying a Business Opportunity

The likely range to buy a business opportunity is 11 to 12 percent in today’s commercial loan interest rate circumstances. This is usually a reasonable level for home based business borrowing since it is not unusual for a commercial real estate loan to be in the 10-11 percent area. Due to the insufficient commercial property for lender collateral in a small business opportunity transaction, the price of a business loan to acquire a business is routinely higher than the cost of a commercial property loan.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Down Payment Expectations to get a Business Opportunity

A typical deposit for business financing to buy a business opportunity is 20 to 25 % depending on the type of business along with other relevant issues. Some financing from owner will be seen as helpful by way of a commercial lender, and seller financing might also decrease the business opportunity deposit requirement.

HOME BASED BUSINESS BUSINESS LOAN STRATEGIES:

Refinancing Alternatives After Buying a Business Opportunity

A crucial commercial loan term to anticipate when acquiring a business opportunity is that refinancing business opportunity financing will routinely be more problematic than the acquisition business loan. There are presently several business financing programs being developed which are more likely to improve future business refinancing alternatives. It really is of critical importance to set up the best terms when purchasing the business and not trust business opportunity refinancing possibilities until these new commercial financing options are finalized.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a Business Opportunity – Lenders to Avoid

The selection of a commercial lender may be the most crucial phase of the business enterprise financing process for buying a business. An equally important task is avoiding lenders that are unable to finalize a commercial loan for buying a business.

By eliminating such problem lenders, business borrowers will also be in a better position to avoid many other business loan problems typically experienced when buying a business. serial entrepreneur to avoid problem lenders might have dual benefits since it will contribute to both the long-term financial condition of the business being acquired and the ultimate success of the commercial loan process.

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