General Question

Notreallyhere's avatar

Can you recommend a good financial institution for a commercial loan?

Asked by Notreallyhere (728points) June 3rd, 2008

I wanna buy a business and my credit is not perfect.

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7 Answers

richardhenry's avatar

The market climate isn’t particularly allowing right now. Maybe someone will be able to make a recommendation?

Notreallyhere's avatar

Yeah, thats what I’ve been hearing from my mortgage broker.

srmorgan's avatar

a lot depends on what part of the country you are located when it comes to looking for a bank. If you have no track record as a business owner and less than perfect credit, you are a relative risk.

One option to follow is to make an arrangement with the seller of the business so that he would finance the purchase and let you pay off the note over time, presumably at a low interest rate. There are tax consequences to a sell and finance that I won’t get into here,.

You have to be very cautious about buying a small business. Are the financial records accurate? Has the owner been running the business according to the way it should be run, legally, or has he been taking cash and not including it as part of his book income?
Was there a recent audit? Have their been any labor complaints or violations filed in your state?

A close relative of mine, and I am embarrassed to say this, got screwed on the purchase of a business about 15 years ago. The seller financed the deal, ok.
The seller’s attorney made all the arrangements, there was supposedly a significant amount of cash business that was not being reported and of course could not be documented or proven to exist.
So against my advice to my—-, he bought a business in an industry where he had no prior experience so he could not evaluate the records of the business presented to him.
He did not hire an accountant to review the financials, he took the word of the seller’s attorney that everything was “kosher”. He also did not use his own attorney and that attorney did not draw up the papers in a way that was advantageous to my relative.

It was not a scam, but he walked into a business with a big note to pay off, he was undercapitalized, the seller sold the note so my relative had no recourse with the seller when things went south and he lost about half of his life’s savings on this venture at the age of 65 when he really could not afford to lose that much money.



richardhenry's avatar

SRM FTW! Seriously though, that’s some sound advice. Gathering funds is the least of your issues.

srmorgan's avatar


Experience is a great teacher.

What does FTW stand for? I am a little too old for some of this text messaging short hand,

richardhenry's avatar

It means ‘for the win’, and indeed it is.

Notreallyhere's avatar

Thank you all!!!

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