You're probably wondering how you will get the money to buy a small business in the first place, and how you will know that your plan is going to work. First, you have to pick a business that's a high earner, and then get a loan to buy it. Now, this is where most people waiver. They hesitate to take that initial step. But, it is important not to vacillate at this point, and if you see a good business opportunity with good revenue potential, don't let it pass you by.
Just because you do not have the money that you need right now to buy the business does not mean that you have to give up your plan. Like most people in similar circumstances, all you need to do is get a loan. These days, most loans do not require a hefty down payment. Given below are a few tips to simplify the financial aspects of your business buying opportunity.
Get An SBA Guarantee Along With A Simple Bank Loan
It is important that you supplement your bank loan with a Small Business Administration (SBA) guarantee, which covers the major part of your loan. Most local banks give an SBA guarantee, depending on whether or not the business qualifies for it. If it does qualify, most financial institutions will be eager to lend the money to a business venture that they do not consider too risky for them. For SBA guarantee guidelines, visit www.sba.gov.
Get Initial Equity From External Investors
If you can get an external investor, your job is almost done! One of the best ways to persuade a loan officer to lend you money for your business is to prove that you have the financial means of covering the (potential!) failure of the business venture. This option is particularly attractive because you don't have to put in any money of your own. It also helps if you have knowledge or interest in the business that you are buying, as this also encourages the loan officer to grant a loan. They don't want to give out money to just anyone - you should have some knowledge of the area of business in question.
No Money Down Business
Buying a business with the intention of selling is like conducting any other business, where there is purchase, sale and profit. The only difference here is that the purchase and sale is that of an existing business. An undervalued business can be bought and sold for a high profit. You can also get a commission on the sale of the business, and sometimes be included in the management and profit sharing of the business after its sale. So, it's like reaping the benefits of the business without really being involved in it. This will also ensure a regular income in the future.
It is not very difficult to get a loan for buying a business. Care has to be taken in certain aspects, such as making sure your credibility is good. Also, you must have a sharp eye for acquiring the right kind of business, one that will be a success, or attract the attention of interested buyers if you want to sell it outright.
With a bit of diligence, patience and business savvy, you can buy a business for little or no money down.