Mack was frustrated. His bank was giving him the run around regarding his offer to buy a business. Because the business didn’t include land or a building, they were reluctant to finance him. Mack thought the deal was dead and reached out to me for support.
Every week I work with people who want to buy businesses or commercial properties and don’t have quite enough money. Often, they are a little disappointed with their recent interaction with a bank and sometimes, like Mack, they are ready to give up. However, if we are creative in financing the business sale, we can revive the deal, and everyone can move forward toward their dreams of retirement or business ownership.
So here are some creative financing ideas that seem to work for buying businesses and commercial property that many buyers might not have considered.: Not all banks are created equally when it comes to financing businesses and commercial properties. Depending on their appetite for risk and portfolio diversification, banks have different lending strategies.
In Mack’s case, we went back to the owners and explained the situation. In a couple of hours, they negotiated a three-year loan with an interest rate that benefited the seller and worked for the buyer. The buyers were ready to move on. Mack had a considerable amount of down payment, and while the sellers would have preferred a full buyout, they understood that this was the best option at the moment for everyone involved.
Creative financing is an option and sometimes the only alternative when buying or selling a business. Exploring all the possible options should be one of the first things you do when considering buying a business. The second should be figuring out your exit strategies; however, that is the topic for another conversation.Pivotleader Inc.