Advice about Business purchase

[Jason_Lee]

I have been researching a few business ideas. I have owned an online designer clothing website for a while now, and as one of my business ideas im thinking of taking that to the next level. I have seen a business for sale that is shop based and it would be a really good next step. The business i want to buy has been established for years, its in a prime location with lots of passing trade and it turns over £560,000 per year with an incredible profit. I believe that incorporating this with my web business would be very profitable.

However.....

I need to gain investment in to this business purchase. Can anyone advise me. Do i need security for this type of loan? Can i secure the loan on the business and its assets? Is the loan acceptance based on me or how well the business is doing?

On the other hand is there anywhere i could get investment from? I would be willing to take on a silent partner. Anyone on here interested in this kind of venture?

Please, all help and advice would be much appreciated!

 

[Jayne]

You usually need to put down min of 20%-30% of the price to get a business loan. If you own your own home and there is enough collateral in it, some banks will let you secure the loan with that.

Jayne

 

[Jason_Lee]

Thanks Jayne

Im looking for roughly £150,000. The turnover is already £560,000 per year. I feel this is a great investment as the return on the investment is very good and quick. This is a good buy as i know the owner.

What other ways could i raise the finance? Does anyone offer loans based on the books at the moment, or an unsecured loan, or something along those lines? I would rather gain the interest from a personal investor who would consider coming in on the business and taking a % of the profit plus his investment or something like that.

All advice large or small is excellent.

Thanks again Jayne.

 

[bwglaw]

It is worth having a consultation with a Financial Advisor because we do not know enough about your circimstances, including credit scoring, experience, etc which are a few of the factors.

You mention you have an online designer clothing website. A lender might wish to take into consideration the performance of this business, including turnover, surplus etc. If you have a business account for this business then I suggest you speak with the Business Banker at that Bank.

Jonathan

 

[DuaneJackson]

I doubt you'll find an investor here, UKBF members have long memories.

 

[Let it ride!]

Jason

Many ways to approach this one - a private investor (business angel) is potentially difficult to find and can be more trouble than they're worth.

Borrowing the money on the back of the business being purchased is possible but further info would be needed - your own business and it's profitability/record would be important - possibility is A Small firms loan guarantee scheme (SFLGS) which depends on various criteria.

If you want any help email me.

Kind regards

Ian

 

[alejandro]

I doubt you'll find an investor here, UKBF members have long memories.

sounds interesting...

 

[Alpha]

sounds interesting...

All you have to do is look at the history of posts by this person to see what Duane means

 

[Steve Roberts]

Hi Jason,

I buy and sell about 50 companies per year, the average turnover would be (circa) £2m but I have bought smaller companies (and indeed bigger ones). I might be interested in investing for a percentage of the equity, providing I have some comfort level as to an appropriate exit-strategy in the medium term.

My party trick is that I can look at a company's P&L and B/S and will know pretty quickly whether or not it's a goer. I'm happy to sign a non-disclosure-agreement if you want to communicate further - I'm happy to draft this if you like. If you want to talk further please email me, following which I'll sign an NDA and then I'd need to see some numbers and a proposed business plan.

Cheers

Steve