Financing Help Needed
I have had a very nice business opportunity fall into my lap. A business (without real estate) has just come onto the market. The current owners are retiring and they have a large nest egg. They are already wealthy. They aren't funding their retirement with the proceeds from this sale. This business was the wife's. It was just something to keep her busy. They have owned it for 18 years!
Anyway, the franchisor has given them a deadline of 12/31 to relocate into a smaller space within the same shopping center (from 6000 sq. ft. to 4000). The owners are trying to sell, but if they don't, they will just close the doors and liquidate the inventory and fixtures, furniture, and equipment (ff&e).
The purchase price is $100K. The inventory is worth $100K. The ff&e are worth another $180K. The business cash flows $115K/year.
I have $50K of liquid funds to put into the deal, and the owner is willing to carry a note for another $50K. I'm hoping to get the owner to secure their 50K against the inventory only. That will leave the $180K of ff&e available for collateral for additional funds.
I’m needing an additional $50K or $75 K for working capital to get everything moved, to pay for lease and utility deposits, and the day to day costs of running a business. Any ideas? I need solutions that can be implemented quickly.
Dave,
Email me your name and phone number and I will hook you up with my contact that could help you with needed funding for this opportunity.
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Best, Dave
What you are looking for is a WLOC or working line of credit. You should probably have the seller hold the mortgage on the ffe and go to your local bank for the credit line for the inventory. I hope you have some reserves left for operating cash, because the day to day bills will eat your lunch if you are not careful. When starting out, you need to watch very closely expenses, expenses, expenses. New business cards, new fancy ads, promotions, charitable donations for the local high schools, all add up very very quickly.
You will need a business plan, hopefully some similar background, and good credit for this option. Additionally, I would recommend you speak with a Sr. lender at a small bank, rather than letting it walk up the food chain.
Good Luck,
Shawn(OH)