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Markus Financial Group
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Markus Financial Group |
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Financing A Business Purchase
Traditional Financing
The existence of goodwill, however, may not be the only problem when it comes to borrowing money to buy a business. Far too many business owners fail to keep good financial records. This is most often the case with businesses that deal with a lot of cash, such as restaurants, car washes and auto repair shops. Without good records, it is very difficult to verify a company's income. Without income verification, the valuation of a business involves substantial guess work.
Even though cash intensive businesses are difficult to value, there never seems to be a shortage of potential buyers. But with a lack of clean records, these buyers must rely upon their personal savings and lines of credit, or friends and family, to finance their purchases. Seller financing is sometimes offered, but usually in limited amounts and for short periods of time.
SBA Financing
Obtaining an SBA (Small Business Administration) loan is a great way to buy a business. In fact, according to Forbes Small Business (October 2003), the SBA has distributed more than $230 billion among some 1.3 million small businesses since its inception in 1953. Former clients include Hewlett-Packard, Callaway Golf, Outback Steakhouse and Fed Ex.
Markus Financial Group works closely with several SBA lenders, including Popular Small Business and Wachovia Bank, and we will gladly provide introductions. For more information on SBA financing, please call 561.330.7715.
Private Investors
In select situations, Markus Financial Group will introduce its clients to private investors, also known as venture capitalists or angel investors. The circumstances in which such introductions occur depends on the size of the deal, the quality of the company's business plan, and the management team's experience. To discuss private investor financing, contact Patrick Gostley, Managing Partner, by phone or email at pgostley@markusfinancial.com.
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Markus Financial Group LLP Mergers & Acquisitions ● Corporate Finance ● Business Brokerage
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Since the purchase price of
most businesses includes some form of goodwill, it is very difficult to
secure traditional bank financing. Goodwill, put simply, is the
difference between the value of a company's tangible assets and its
selling price. And while you may be able to finance a portion of a
company's tangible assets (inventory, equipment, etc.), very few
commercial lenders will loan money against goodwill.