Non-Real Estate Loan

[Nate Crump]

Not related to RE, but I know there are bright minds here, so I thought I'd ask.

I am looking for a business loan and was wondering if anyone can point me in a good direction toward a lender you might know of with a good reputation in that area?

It's somewhere between $150,000 and $250,000 I'll need, so not those little lenders I keep running into on Google.

It's not for some new, risky business I'm hoping is a homerun, but for a long time, well-established franchise that has already been doing great for a number of years.

The length of the loan doesn't matter too much to me, as I could throw large chunks toward this summer, and then probably be done with it by next summer, as my current business, which is massively passive, is very seasonal (Spring time).

I won't say I'm desperate, but also with the shorter nature of the loan, and proven sales, as well as the success of my other business, I would even be willing to go for higher than normal rates.

Anyway, thanks for any advice on lenders you might know of that deal in this area. My Google searches just haven't come up with what I'm looking for.

[Joel Owens]

If no real estate you are looking at buying the assets of the business. If the real estate isn't owned you will need to qualify with the landlord on the lease. You will need to qualify with the suppliers that deliver goods and services to the business. They might make you cash only instead of credit etc.

If the business has not been re-imaged in awhile you could face a very large crunch to cash flow as the landlord rents increase every year or so and a massive re-imaging takes place. You have to keep the business fresh and make it pop or sales start sliding from the dated look as competitors open up shop.

If it's a gas station just Google gas station lenders as there are ones that specialize in those. You can also go to BizBuySell.com and look up gas stations for sale close to your area. Contact that listing business broker and likely since they list those they already have contacts for those types of loans and what would be required.

Many businesses do not have a bank loan. The seller for instance wants a 3 times net profit multiple. If it makes 100k net profit they want 300k. Buyers try to get 2 times net profit at 200k purchase price putting 30 to 50% down and have the seller finance the rest. Usually a low interest rate at 25 year amort. for 3 to 7 years until balloons. If this concept is a franchise there might be a franchise transfer fee and also you might have to meet liquidity and asset based requirements to get approved. SBA loans a few years ago were very hard to get. They have eased up some but still lots of red tape. If you have cash you might go the owner finance route and it's very common with businesses.