Is 100% financing possible for buying a business?
Investors in general don't particularly like entrepreneurs with no "skin in the game" but you are talking about what I would consider a leveraged buyout to a certain extent. (I don't think this question shoul really be categorised as venture capital). However,mine answer is yes, it's technically possible to use 100% debt in a buyout, the point is from a lender perspective who is backing the debt and with what collateral guarantees ? The latter is point is what you should consider before trying to find the 2m you are missing.
Is it possible to buy a business with an SBA loan, seller financing, and no personal guarantee so that my "skin" is limited to 20% or less?
Sameer is correct, SBA will not finance a loan without a personal guarantee. I have been involved in SBA lending since 2012. That point is non-negotiable. Skin in the game is part of being an entrepreneur if you can negotiate a full seller carry, I agree again that this would be to your advantage. One small concession is that your lender will assist you in some of the due diligence. The lender I work for will verify that the purchase price of the business is substantiated (the SBA doesn't support you purchasing a business for more than it is worth). We also have a legal team that will perform an analysis of the purchase agreement and seller carry back note to make sure that it does not unfairly favor the seller. All these services are rolled into the origination fee (there would be a fee if an outside/3rd party business valuation was required). You are the company, they are lending for your benefit as much as the business which is why you are required to be on the hook.
How can you get a business loan with no down payment?
Most of the banks and non-banking financial companies are offering business loans on zero down payment. You can get business line of credit loan for your day to day expenses with zero down payment. Banks sometime ask for a collateral before providing a business loan but you can easily get one without any collateral from Fintech groups in India. Bangalore based fintech company Lendingkart is providing business loans with zero down payment on very easy and affordable terms.
Small business loans/startup money?
How does one go about getting a small business loan or grant for startup money for a business? I guess I also need to add that this is for a tattoo shop, not sure if that makes a difference. No credit has been established yet, but you have to start somewhere!
Can you get a business loan without collateral if you have a 25% down payment?
Lending money can be a risky business, which is why most traditional lenders require borrowers to put up collateral for a loan. You may be a financially stable and qualified business, but most lenders don’t want to carry the risk of a borrower defaulting on a loan, which is why they ask for valuable assets to secure your financing.If you don’t have collateral to secure a business loan, there are financing options outside of traditional loans, and you don’t have to settle for incredibly high rates or unfavorable terms to get them. Here are just a few of the options available to you:SBA Loans Because of the SBA’s strict guidelines and guarantees, lenders are more confident, which means higher rates of approval. If you’re looking for a collateral-free loan, the SBA 7(a) loan is a great option since loans less than $25,000 may not require collateral. You can use the funding from an SBA 7(a) loan to buy land, refinance existing debt, cover construction costs, or buy supplies for your business.Business Credit Cards These are great for small business owners just getting established or in need of quick funds for the unexpected. Business credit cards are a flexible supplement to other financing you may already have in place.Business Term Loans With a business term loan, lenders advance you a lump sum that you repay over the course of the next 12 to 60 months. Since these loans usually have a fixed interest rate or fixed flat fee, it’s easier for you to plan your monthly repayment rate.Working Capital Loans If you’ve been in business for two or more years, you could qualify for a short term loan. These are easier to qualify for (usually within a 24-hour period), and the payback period is usually between 3 and 18 months.
If I get an SBA loan and my business fails, will going bankrupt let me be discharged?
Here's my experience. Answer is yes.My business “capital" bank loan was SBA backed. The terms were 75% backed by the SBA, 25% personally guaranteed by me. My personal guarantee was with the bank and the SBA.This means (or meant):the business had to have the performance to qualify with the bank to be approved for the loan,I had to have the credit history to help the bankers make the decision that the business and I were worthy of the loan.I had to also qualify with the SBA, which, if I remember correctly, was a credit check.The business was 2 years old before I started the loan process. It took about 6 months to find a bank and an accountant who the bank trusted. Money in hand a couple months later.The doors closed after 5 1/2 years of operations. I had to declare personal bankruptcy (Ch 7). The loan was listed in the bankruptcy petition. I was personally responsible for roughly 25% (plus interest) of the balance. The bank made a claim to the SBA for 75% of the remaining balance.My bankruptcy attorney “listed” both the bank and the SBA (among others) as creditors in the petition. The portion of the loan I was personally responsible for was discharged.I was anticipating the SBA coming after me because they are a governmental entity. There was no activity from the SBA in any capacity before, during or after my entire experience, beginning through death.I also talked with SBA representatives about a year later at an event and told them the story. They said an SBA backing isn't a tax. Chi 7 bankruptcy will excuse responsibility towards the personal guarantee of the SBA backed loan. All taxes are not discharged in a bankruptcy.Another short story. A friend had also went Ch7 bankrupt with a SBA backed “capital” loan. Several years later she qualified for a SBA backed “start-up” loan. I was flabbergasted……our tax dollars hard at work…and I think one of the best use of our taxes.