We are trying to sell our independent pizzeria and most people don’t have enough for an all cash deal. How can we get SBA loans or other types of loans in this economy? Providing up to 20% financing for less than 2 years seems ok, but a larger amount seems kind of risky.
Of course, we can always include a clause where non-payment results in repossession of the business, but we won’t have anyone available to take back the business. I also have a question, in that scenario, the new owners would lose their down payment?
Anyone have experience or advice with owner financing and the risks and benefits? It seems that there are interested buyers, but that finding a buyer with the financial resources is quite difficult.
Hurry! Seek the advice of legal counsel! You are entering into a contract & it s/b written to benefit/protect you…
If the down payment is less than desirable, the buyer may/will walk away from the sale - if it is too much hassle etc - & you’ll be left having to retake/rebuild/resell the business…
Your loss can be great!
SBA/local banks currently are funding very few restaurant deals - that is the buyers responsibility to pursue, but in Florida NO BANKS I know of are even thinking of financing restaurants…
I sold my half of my previous business to my partner last year. He made a 5% down payment, was a month late on his first payment and then went out of business two months after that…still waiting for him to get a job so I can try and get a little money out of it.
Get legal counsel on this and be sure it’s the right deal for you.
I hope Suntrust comes through with a SBA loan for me, will find out in a week or so. They actually called me back after two weeks of sending the app to see I was still interested/needed help with the forms. Hopefully, it is not a cruel joke.
We’re finding the same story here. NO bank we’ve spoken with will touch the mortgage on a restaurant currently. We couldn’t even interest the 3 local banks into sponsoring us with a SBA loan, they claim it’s “too much paperwork”…thanks, it’s only my dream, guess it’s not worth their time.
We’re trying to negotiate a suitable lease on a very nice spot right now, my main bank will back a purchase with a 2 year business history.
I’m just adding my voice to the chorus here…seek a competent attorney!