Any chance to buy an existing business with no money down? (lender, loans)

[Nola87]

This is my first post here because I did a Google search and this forum was one of the links and I looked around and it seems that their is a lot of knowledgeable people here.

Ok, I work for an automotive web based retail company. I've been here for almost 3 years, been in the industry for almost 6 years. Its just me and the owner. The owner comes in for a couple of hours a day 3-4 days a week, i'm here 40hrs a week. I literally run this company, I know a lot of employees say that but I really do. The only thing I do not do is log in to the company bank account to wire money to the over seas manufacturing company we use for our products. I do have access to the same bank account and I do pay for other supplies from US based companies though.

A mutual friend of the owner and I looked over the books and made a $100k offer for the company a few months ago. By the time my boss decided to take the offer it was too late as our mutual friend had gone another route. According to the mutual friend, my boss brings in between $5-$7k a month. Now I have not seen any official books but I know what the company brings in every month, I know what our product costs are and what our overhead is. That $5k-$7k is very likely spot on.

With all that being said, I got an idea that I want to buy the company. My biggest problem (which is a big one) is I have no money to put down and not much to put as collateral. I know I could afford a higher monthly payment because that $5k-$7k does not include my current salary which is roughly $2k/month. I don't have a house note or rent, I have a new truck thats paid off so as far as big monthly obligations, I don't really have any.

With all this being said, I know its a long shot but is there any chance anyone would lend me money, high risk, high interest or any kind of loan?

[Billy_J]

It can be done and has been done in the past with a lot of fancy maneuvering and paperwork. But usually in cases where the business has a lot of potential for increased earnings in future years. Or the assets of the business are worth more than the sale price. Then you can make more money or sell off assets and easily pay off the debt.

You DON'T want a high interest loan!

Local lenders in your area would want something for security for any loans. Like a house, business property, car, business inventory, etc. Go ask and see what they can do. (They will want some form of backup should you get hit by a truck or whatever.)

Then the seller may want to keep his same income if he is not receiving cash for the sale. Or if you can provide some cash from a loan, then maybe less a month would do? You would need to talk to the owner to see what he is willing to do.

And whatever you wind up with, you would need enough income to live on and pay business expenses. If the loan interest and payments are too high or the owner wants too much per month, then of course it will not work and don't do it.

Also you will need a lawyer to handle the sale. Everything needs to be spelled out. Someone will need to pay for that.

[cpg35223]

If a business will sell to you with no money down, it's very likely that it's not a business worth having.

[Hemlock140]

When I bought I paid cash up front, as most sellers will require. Getting a loan from a bank is really hard without a proven track record in that kind of work, lots of equity, and a really good business plan.