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| *Loan,banking and credit>>>sba loan |
I'm buying a business.Need a $28,000 loan very soon! what's best SBA or etc.? What's the difference in loans? |
I'm buying a business.Need a $28,000 loan very soon! what's best SBA or etc.? What's the difference in loans? The main difference in loans is going to be the loan officer reviewing the loan package. SBA (Small Business Administration) doesn't offer loans directly to small business owners. The SBA provides loan guarantees to banks. You must still apply to the bank for the loan. Some banks do focus more on offering SBA-guaranteed loans. What the SBA guarantee does is provide security for the bank. If you can't repay the loan, the SBA will repay a percentage (e.g., 80%) to the bank. This means the risk the bank is taking is lower and they can offer loans to more businesses. As the borrower, you still have to provide collateral (i.e., the amount of cash you're investing in the business), references, be able to demonstrate how you'll repay the loan, etc. You will also need to submit a business plan that includes your marketing plan, previous history (since it's an existing business), operation plan (how the business will be run), bios of key personnel including previous experience operating similar businesses, etc. It helps if the existing business owner has a good relationship with their banker because it can make the process easier. But it doesn't eliminate the paperwork or fundamental qualification requirements. If you don't think you'll qualify for a business loan and if you own a home, you might refinance your home to get the money. If you have sufficient credit card limits, you can take a cash advance on your credit cards for at least a portion of the purchase price. You can borrow all or some portion of the money from the seller of the business. This obviously means the seller doesn't get all of their money immediately. If they need the full amount, this won't work. However, some sellers find it attractive because you pay them the interest on the loan. If the seller doesn't think the business will generate enough income to cover the loan payments, I would seriously reconsider whether I wanted to buy the business. Those are a few of your options. Don't believe offers of government grants. The government doesn't provide grants to business start-ups. It does have programs for technology and research projects. http://instantlend.com has lots of finance options Even though it's only 28K to buy, don't rush into it. If you are not even yet aware of the range of loan options, you need to step back and look more closely. What are the ongoing and unavoidable expenses month-to-month, i.e; lease, insurance of all types, vehicle(s), taxes and accounting, etc. Talk to your personal banker if he/she is very experienced, and you have good "chemistry", but not afraid to give you the straight goods. They can be a wealth of information to advise whether the type of business you are looking at is worth it. I have seen people acquire businesses at times, just because others said they couln't do it or it wasn't worth it. Seems 80% of the time they're right. experience with finance |
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