Financing

Discussion in 'Professional Chefs' started by chefjerr, Sep 22, 2005.

  1. chefjerr

    chefjerr

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    i am applying for sba loan for a existing business it costs $300k, i can only get around 200k, has anyone tried alternate financing, i keep reading about unsecured loans for credit card transactions, any one ever use these,sounds a littletricky, the rates are the same im qouted for on sba, thanks
     
  2. ricardo

    ricardo

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    Unsecured loands carry a preminum because they are just that unsecured against brick and mortar usualy cecured against an IOU but overall depends on the risk rating and the amount to be borrowed
    What your lower and upper limits in funding?
     
  3. kuan

    kuan Moderator Staff Member

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    Well, you could bring in a partner.

    Uh, credit card programs which take percentage of sales toward loan repayment.

    Mortgage your house a sixth time? ;)

    Set up longer terms with your big supplier, see if you can go out to 90 days.

    Don't forget to turn off the lights when not in use. :D
     
  4. chefjerr

    chefjerr

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    hi thanks for the reply, i have no partners available to help me to buy this restaurant, i only need 300 - 350k total and the owners will sell, they (the owners)
    said they would take the 200k, and stay on spliting profits, but i would rather try coming up with the extra 100k or so and buy out completely, so far the credit card thing seems only thing available as i dont think the sba will go for the whole 300k, i know its complicated sounding, but thanks for the input
     
  5. kuan

    kuan Moderator Staff Member

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    Well, you don't need the whole 100k right? All you need is another 10-20k to leverage the loan don't you?

    SBA loans for restaurants are tough. I don't know anyone who has ever done it.

    You can always ask the owners if they can help with the financing. That would be a clear sign of a healthy business. ;)
     
  6. panini

    panini

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    Chefjerr,
    Is 350 the price for turnkey? Partners , credit card, all don't seem to be good options.
    Have you had someone bust the books? If the books are clean and not cooked, you can also submit that to SBA. Keeping in mind SBA are not the lenders. Do you have a CPA helping with your presentation? Does your business plan declare ownership and has that been done? I ask for there could possibly be a situation, like minority, woman, etc. ownership benefits to work for you.
    The staying on and splitting profits?
    If this is a sound business and the profits are there, and the owners won't finance with 60-70- percent down, I'd be leery.
    With a good mouthpiece, you might be able to get SBA/Lender to release some of the lien so the owners would have some recourse.
    I'm going to assume that you have good professional help with this, but if the CC seems to be the only thing available you might want to find someone else to help. Maybe a little more creative. Have you sought venture Cap?
    Keep us posted
    Pan
     
  7. chefjerr

    chefjerr

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    350 is turnkey, possibly even get it for 300, the reason they dont want financ, (but may still be willing) is the owners son whose name the restaurant is in, his wife left heim and the are going after all their assets and restaurants to get 1/2 money, they have 3 or four other restaurants in other areas about 25 miles awy form this one, so if they stay on financing or owning in anyway on the books , she gets 1/2 of that, the owners father is the brother of the owner ive worked for & known for 5 years,so i trust these owners, the place grosses 110 k, month with lease of 7k, financial statements are coming availble this week for the sba to look at, im just not sure the sba will cover the whole 300 or 350k with the equiptment there,(its only a year and 1/2 old) plus i have a little equit on my house, i think i could the 200k, but need to come up with 100k extra somehow, its in a great location in a booming population town. anyways that is why i was looking into the credit card thing to see if nayone has used it, thanks again for all the input, guess i just have to wait and see what sba comes back with.
     
  8. panini

    panini

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    Unfortunately the lender probably won't value the equipment at all.
    This whole situation really calls for expert legal advice on your behalf. I don't claim to know anything about it and I don't know what state your in, but unloading assets like that can come back to bite the seller and the purchaser. That puppy could be tied up in litigation at your expense.
    I know you trust the owners, and they might be following what they think is good advice, but, spend the monies for the best professional advice you can get. It my be different from theirs.
    Good luck, always protect your personal assets, try never to use your own money.
    Visit the owners bank and speak with one of their financial guys. Maybe an LOC on a proven track record or loan with direct deposit to the note.
    pan