More than one business owner has been turned down when attempting to find financing. (Roars of laughter…really?)
Especially in this economy small business financing is no easy task. One thing that owners can do is use their voices, the SBA has a very intelligent blog and that is one place where you can not only voice your opinion but also learn about options that exist for special categories. Here is a link to one category of business owners & professionals working to create opportunity – Rural Businesses – http://www.sba.gov/community/blogs/innovative-financing-creating-access-and-opportunity-small-businesses-americas-rural.
There are also programs for veterans for investing in existing, start-ups and continuing small businesses. The creative area of this is finding banks who work with these programs. Many banks have their own regulations that deny loans that may qualify for these programs. For instance one bank I talked with said that they do not honor the veterans loans programs that the SBA offers because it does not meet their underwriting standards – therefore you MUST check the SBA website and ASK THEM what banks provide these loans because many do not. That is why people often get frustrated with these programs created by the SBA, they seem non-existent because they are not offered by the larger banks. Talk to more than one banker.
And then there is seller financing. Often when a seller is confident that the business is solid enough to leave room for loan repayment sellers might finance you in a portion of the business purchase. A lot of this option is creative in the manner that it is often times a more flexible plan than what the bank would offer. In the world of small business brokerage we’ve seen boats, cars and other items put up for collateral or even traded to make a sale happen. In the larger market there could be real estate or other collateral trades. It’s all about what you can agree on, often new owners share similar interests and hopefully new owners are buyers like those in our data base who have been waiting for a business like yours to come on the market.
Sunbelt Business Brokers are here to ensure a smooth transition and continuation of your business when selling and to help buyers find the right fit to succeed and build on a business that has already been proven successful. We can help you find a creative financing option that suits your needs when buying or selling a business.
Call 612-238-1288 anytime to schedule a consultation.