Burke Business Advisors: Business Financing

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How can I finance my business?

Buyers Cash

20%-50% of the purchase price is required for down payment (consider reserves for operating capital, about 3 months)

Seller Financing

Lower interest rates

Business and assets serve as collateral for Seller's note

Personal guarantee

Owner has some interest in the business

Institutional Financing

SBA/Conventional Financing

Minimum 25%-30% down payment

Balance amortized over 10 years and variable rate of prime + 2%-3%

Business serves as collateral for the loan

Personal guarantee

Credit score 675 or better

A Bank Loan

Tell them you want a loan to start a new business

Collaterize the business with assets

Personal guarantee

There are 4 "Cs" involved in any decision to loan money to someone: Cash, Credit, Collateral and Character. The fact is that it doesn't matter whether you go to a bank, use the SBA guarantee service or go to a friend or relative for the loan.