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Questions for those who purchased a business with a SB loan

Discussion in 'Business Operations' started by Fubba, Jun 25, 2013.

  1. Fubba

    Fubba LawnSite Senior Member
    Posts: 356

    Did you use an SBA loan or a direct loan from a bank?

    Were you able to use all the equipment as collateral for the loan?

    I'm trying to purchase another lawn care business with about 20-22k in equipment for a total price of 30k. I can put a little down, but not the full difference. I'd be willing to put the equipment I already own in as collateral too as I'll be paying this off very quickly with the 60 new accounts I'll have too. The local bank I went to today was very leery about using anything without a title as collateral for the loan.
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  2. Fubba

    Fubba LawnSite Senior Member
    Posts: 356

    Bump
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  3. MikeTA95

    MikeTA95 LawnSite Member
    Posts: 84


    I've been through this. Every bank turned me down because I didn't own a home to put up without collateral. I eventually negotiated a deal with the owner of the company, thinking I'd quickly make it all back. I still haven't been able to pay him in full two years later. (I was supposed to before the end of that year).
     
  4. Will P.C.

    Will P.C. LawnSite Senior Member
    Posts: 966

    I think you can pretty much forget the idea of putting up used lawn mowers and chainsaws for collateral and even stuff like cars. The idea behind that is that this stuff will end up the junkyard one day. Owning a small piece of land is different in that it will still be here 20 years from now and will probably be worth more.
     
  5. Southern Lawn Care  LLC

    Southern Lawn Care LLC LawnSite Senior Member
    from Alabama
    Posts: 314

    My bank wouldn't loan me a personal loan or business loan to buy a company if all I was going to use was equipment as collateral. They don't have a true way of getting the value of it. Luckily for me the business I bought out had a couple trucks with the deal and was really In a bind. I used ONE of the trucks as collateral for the lawn due to it itself being worth more than the loan amount I needed. I did not put anything down cash wise either. All of my banking personal and business is with one bank that Iv been with for years. Normally I'm able to call and tell them what I'm wanting to do and the papers are done normally the next morning.
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  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,235

    No way you will get a loan like that. You may try to offer the owner a good down payment and 25% of the profits.
     

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