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View Full Version : loan to buy former LCO??


henri4207
12-26-2005, 02:14 PM
I have been an LCO for 8 years, gross over 100K, and I also run my fathers LCO, which gross around 180k. I am wanting to buy him out and wanted to know if there is anywhere I can get a loan for around $100k to buy his business or is this just not possible? I have already went to the bank, received a credit line of 20k, but I really wanted more than just a credit line. Is there a loan out there to buy small business if there are records to show the income? He has been in business for over 20 years and has all detailed records of income, taxes, etc.?? Any help would be greatly appreciated!!
Jeremy

Az Gardener
12-26-2005, 02:50 PM
The loan amount (100-K) is probably too low for most, you will have more luck borrowing more. I don't think the # work though, 100-K for a company grossing 180 sounds like too much to me. But the profit is the real determining factor. You can try the SBA, you will need a business plan. Sounds bad but if you are a minority or a woman your odds are better for the loan. Talk to them at the SBA and get the real skinny. Other option is give pops a big as down as you can and have him be the bank. But you should pay him more for that arrangement.

Jpocket
12-26-2005, 03:19 PM
I have been an LCO for 8 years, gross over 100K, and I also run my fathers LCO, which gross around 180k. I am wanting to buy him out and wanted to know if there is anywhere I can get a loan for around $100k to buy his business or is this just not possible? I have already went to the bank, received a credit line of 20k, but I really wanted more than just a credit line. Is there a loan out there to buy small business if there are records to show the income? He has been in business for over 20 years and has all detailed records of income, taxes, etc.?? Any help would be greatly appreciated!!
Jeremy

Why is your dad making you pay that much, I would think you would pretty much inherit it, or pay him enough for the rest of his life to enjoy retirement.

Mower For Less
12-26-2005, 03:40 PM
Yeah, it is your dad, dont you think he could offer you "seller financing" where you pay him every year. Would be like a pension for him.

Kevin

Fantasy Lawns
12-26-2005, 05:25 PM
I just went thru the SBA loan process last summer for $50K .... this was the smallest amount they do .... it's all I needed to pay off some loans & get some new equip

Anywho ....it's almost the same as buying a home .... lots of paper work .... lots of record checking, business audit etc.

I went thru Capital One .... they were the middle man too the SBA ....it was much easier to use them as this is what they do .... worth the $750 process fee .... my rate is not the lowest as I got such a small amount but it was just over 6%

I send em $1k per month .... which is $250 extra ..... I'll have it paid off in 44 months .... building my business credit .... so when I do sell ....it's one extra feather in my hat ..... if a business can get an SBA loan .... that shows one is moving in the right direction & a potential buyer has to give that some credit of worth

walker-talker
12-26-2005, 06:20 PM
More than likely they will want a very well prepared business plan, the lender that is.

olderthandirt
12-26-2005, 06:24 PM
Why is your dad making you pay that much, I would think you would pretty much inherit it, or pay him enough for the rest of his life to enjoy retirement.

Wheres it written that a parent OWES an adult child anything? If they raised their kids the right way the kids would know responsablility and knows that nothing in life is free. I commend the guy for wanting to BUY his father out in 1 lump sum, same as any other person or business would have to do if they wanted it

Jpocket
12-26-2005, 06:51 PM
Wheres it written that a parent OWES an adult child anything? If they raised their kids the right way the kids would know responsablility and knows that nothing in life is free. I commend the guy for wanting to BUY his father out in 1 lump sum, same as any other person or business would have to do if they wanted it

It's not written, where I come from if a young man shows an interest in the family business, the father/grandfather will "groom" them, and show there son the ropes and eventually give pass the business on. Some times it's just expected. One of my main reasons for being in business ( not necessarily the lawn business) is to one day pass the business on to one of my sons. So when Im dead and gone my name will live on, and my children will have something already established to build on. when the graduate high school they won't have to worry about going away to school, and trying to find a 9-5 after they are done.

When im old and I "give" the business to my son I will work in the business as long as im able. When I can't I will still get a portion of the profits "Pension". Back to the point, I would'nt make my son buy me out full price, and I highly doubt my father would make me.

olderthandirt
12-26-2005, 09:23 PM
So when Im dead and gone my name will live on, and my children will have something already established to build on. when the graduate high school they won't have to worry about going away to school, and trying to find a 9-5 after they are done.

Would'nt you rather your kids learn to survive with out a handout. Give them the business and it won't mean crap and if it goes into the toilet they won't have any life skills to start and make it on there own. If mine want it then there welcome to it at a price, and the original post did'nt say he was not giving him a price break, in fact it gave very little info on what the business was worth except gross profits. for all you know the guy can have a 5 million dollars nursery that goes with it

Roger
12-26-2005, 09:45 PM
I have to agree with Older ... on this one. Jpocket - your profile says you are 19. "When I'm old ..." is a LONG way down the road. Many experiences will reshape your thinking in the next few years.

We don't know the entire situation, but the father is owed something for what he has earned in building the business, and he may very well need the money to live. Yes, maybe "seller financing" is possible, but if the father wishes to invest in a home for older citizens, the lump money is very important. I am over 64, and know many others my age. Too often I have seen the case of older parents scrapping for bare bones living, while an adult child is living high because the parents scrapped to pay for education, etc much earlier. The view "from the other side" is different at age 64 than age 19.

... too many unknowns here to make harsh judgments about why the issue arises. The answers to these questions is none of our business. Return the focus on the original question: where can he find a loan?

Trinity Lawn Care, LLC
12-26-2005, 10:10 PM
My family is in another biz all together. My family owns a nice size burial vault corporation. It was started by my dad and his two brothers, and is set up to go from father to son and so on down the line. When I was 19-20 I worked for the family, but then decided it was not for me. If I had stayed with the company for five years I could have then purchased my dads shares of the corporation. I would have had to pay the market rate. Seller financing is fine. However, I do not believe that someone should get something for nothing simply because they are related. I think that family should not shaft one another (all though it happens) from either side of the situation. The father built a business. He put sweat equity into it, and deserves to reap the rewards of his labors.

DLCS
12-26-2005, 11:48 PM
If I was wanting to buy my father's business, he would sure as hell make me pay for it and I wouldn't have it any other way. My parents have never "given" me a thing since I turned 16, I earned everything I have. The only thing they have given me was/is advice and thats better than money or material things. I think kids expect to much from their parents these days in the way of material things and money. They want it right now and handed to them.

Jpocket
12-27-2005, 08:45 AM
All im saying is that I know many people that build very successful business, and pass them down to there sons. I really don't veiw it as "something for nothing" as you guys are saying. I find it odd that you guys would labor all your lives only to sell out for a couple hundred thousand.

If a kid works for his dad from the time he is a little boy to an adult, and he shows a genuine interest in the business, I think it's only fair for him to take over the reigns. Im not saying for free, but surely not every nickel dime and penny of what you would sell to someone else for. JMHO

henri4207
12-27-2005, 09:53 PM
Thanks for some of the ideas guys!! I got 20k line of credit so far, and I am working on the loan through SBA!! I am paying more that 100k for the business, Ijust wanted to help my parents live a comfortable lifestyle. I am already going to give them 3k for the next ten years, just wanted to give them more upfront. My Dad is 63, he and he can't go from living on 15K a month to nothing, he started the business late in his life, taught me how to do it, and it is the least I could do for him. Any decent man would take care of his parents if he had the means to do so, and so that is what I shall do.

GraZZmaZter
12-30-2005, 01:44 PM
Glad to see this thread has faltered to the depths of yet another pizzing match..... :realmad: :nono:

Good to see a man with morals who has true family values! Most folks around here in Flint are too busy trying to stick it in their familys azz...

Good luck henri!!!