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Adam Ray 2/7/20 Adam Ray 2/7/20

How to Finance a Business Purchase With Fair to Poor Credit

If you have found the company of your dreams, you may be wondering how to finance a business purchase even if your credit isn't great.

Do you want to finance a business but you've had some credit challenges? Read this article to learn how to finance a business purchase with fair to poor credit.

How to finance a business purchase

There are 30.2 million small businesses in the US. Many folks prefer to own businesses because it gives them the creativity and profitability they have always dreamed of.

If you have student loan debt or a business venture that failed in the past, you may have poor credit.

You may also, however, find yourself with the opportunity to purchase a business that would be a great fit for your skills and experience.

If you are wondering how to finance a business purchase with fair or poor credit, you are not without options. Here are some ways to finance the purchase of the successful business you have always hoped to own.

1. Check Over Your Credit Report

Your own credit may not be as bad as you think. There may be payments that were not recorded, so you can contact companies with proof of payments.

You can also get your score back up by paying down some debt gradually. This may involve getting a second job for a little while, or finding another way to supplement your income.

2. Meet With A Small Business Administration Counselor

You can make an appointment to present your entire plan to a Small Business Administration (SBA) counselor.

They can give you tips on how to improve your plan so it better suits what lenders are seeking. The lender will also already have existing relationships with SBA lenders.

When you visit your counselor, it is important to make your plan look as professional as possible. Demonstrate how your business has been profitable and why you are capable of running it. Highlight the profitability of the business you want to buy, as well as its future growth potential.

When applying for a loan from anywhere, you must fill out an application. Bringing supporting documentation and dressing professionally will also help you.

3. Get A Microloan

If you can't get a loan from a bank, look for investors within your network, as well as micro-lenders.

Microloans are specifically designed for those who can't get loans elsewhere, and the SBA guarantees them. The downside is that interest and fees are higher. There is also a credit limit of $50,000.

4. Get A Bad Credit Loan

Many banks give out bad credit loans. While they initially come with a higher interest rate and fees, many lenders will renegotiate if you are making your payments on time.

5. Borrow Against Your Home

If you are certain that the business you wish to purchase will be successful, you may be able to get a loan from a bank by using your house as collateral. Take out a second mortgage or take out a home equity line of credit.

6. Who You Know

Your family and friends won't ask to see your credit report if you can convince them your business will be successful. You can ask them for funding and talk about their involvement in the future of your business.

7. Government Financing

Some federal and state government programs will finance your business if you meet certain criteria. You may be a veteran or involved in certain types of research. Depending upon your business and situation, they may not even require repayment.

How to Finance A Business Purchase With Fair to Poor Credit

If you have found the company of your dreams, you may be wondering how to finance a business purchase even if your credit isn't great. With a little homework and the right connections, you might find yourself the owner of a profitable business in no time.

For more information on investing in businesses, read our blog today.

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Adam Ray 12/5/19 Adam Ray 12/5/19

5 Ways on How to Exit/Sell Your Business Quickly

Here are some of the ways how you can exit your business smoothly, but make sure to leave the company in safe hands. Make sure that the business is profitable as it is easier to sell a company that guarantees a steady profit.

Sell Your Business Quickly

Here are 5 ways to sell or exit your business quickly

Exit or Sell Your Business Quickly

You had a good run with your company and plenty of success. However, it seems that you are not ready to stick around anymore. Here are some of the ways how you can exit your business smoothly, but make sure to leave the company in safe hands.

Find an Interested Buyer

If you set your mind on selling the company, you should start looking for interested buyers. Keep in mind that this process may require a bit of time and patience.

Here are some things that you can do to prepare your company for sale:

Make sure that the business is profitable as it is easier to sell a company that guarantees a steady profit.
Call your accountant and review the finances. Make sure that there are no issues, and everything is clean.
Prepare a report with revenues and expenses over the last year. You can even go and prepare a financial projection for the upcoming period.

You can put up your business for sale in an online marketplace, or spread the word among the people you know in your industry. Depending on the attractiveness of your company, interested buyers should appear soon.

Offer the Business to Existing Staff

An alternative way of selling the company can be offering it to the existing staff. You may have managers, accountants, and other people working for you.

Ask them if they would be interested in taking over the business full-time because you want to exit. If they have the necessary resources and desire to buy you out, they will respond positively to your offer. That is a great way of selling the company, but ensuring that it is in the hands of someone who knows it inside and out.

Pass the Company to a Family Member or a Friend

If you think it is time for the next chapter in your career, how about offering the current company to a family member or friend? Find someone in your surroundings who is capable of doing a good job and maintaining a profitable business. If you believe they are the right choice, go ahead and pass the company to them, or hire them as CEOs while you remain the owner formally.

Find a Business Partner

If you can’t find a buyer to purchase your business, how about finding a partner? That may mean you won’t exit the company completely, but the partner may take over the areas you don’t want to handle anymore.

That is a great way to remain in the business while finding a new dose of motivation. Who knows, that may be the boost you need to take the company to the next level.

Initial Public Offering

While this may be an enticing option, keep in mind your company needs to be attractive enough for the public. Believe it or not, less than 0.01% of US companies are public. If you estimate that this can be the right move, it may be an excellent way to earn a lot of money.

Liquidation and Bankruptcy

Finally, you can also go with liquidation or bankruptcy. However, keep in mind that this means you will not only exit, but also close the business. That is why it is important to assess all your options and use this one as a final resort.

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