| Can I get a small interested loan to buy the interests .... |
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cashflow101
New Member
Cash: $ 1.30
Posts: 6
Joined: 16 Jan 2006
Location: Boston, MA
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| Can I get a small interested loan to buy the interests .... |
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Can I get a small interested loan to buy the interests of an existing business? I'm considering buying a 25% stake in a liquor store, do you think a financial institution would loan me money to do so?
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Sat Jan 21, 2006 5:05 pm |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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It depends upon your credit rating and what you have for collateral. For example, I could write myself a check for $30k with just my signature (unsecured) and it would only cost me $75 transaction fee and 3.99% for unlimited time. It would actually cost me more if secured by my home using the free HELOC included with my fixed rate home loan (prime - 0.5%). MBNA sent me a business credit card with 7.99% interest rate that I could write checks against, and I do not even have a business.
The best way to tell for yourself, if you do not have such options, is to go into a few banks and find out what is required and what it would cost to secure such a loan. You may not get a low rate unless it is secured by your reputation, something you own, or your interest in the business (which they may be skeptical of if you have not invested any of your own money).
You also have to ask yourself, why the party is selling to you, if it is so profitable? Is it a new venture (unproven) or established? My boss' ex-wife bought a cafe business with a partner. Previous owner made it look better because he was deducting all (including unrelated) expenses for his family. The partner eventually decided to do nothing, which left my boss' ex-wife doing all the work for peanunts. So she sold it to some other sucker (er, ah, investor).
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Sat Jan 21, 2006 7:05 pm |
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