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Selling Business

Discussion in 'Business Operations' started by hgotti, Aug 8, 2005.

  1. hgotti

    hgotti LawnSite Member
    Posts: 55

    I wonder if you can help me out,I am selling my business to a guy he went to the bank but could not get loan,so he ask if he could talk the loan out through me, we would go to the lawyer fill out paperwork of terms of the loan, i will be charging him interest,Is this possible to do and what happens if he doesnt pay on time or doesnt pay at all ,the business is going for eighty thousand so i think i will let him take it out for 4 to five years at around two thousand a month,If you have any input please respond
  2. smullen

    smullen LawnSite Member
    Posts: 57

    I know you really want to see your business, but if the Bank (whos Job it is to decide if a risk is worth it or not) won't give him a loan, why would you???

    I would consider it for a few hundred bucks, maybe even a G, but no way in hell for the money you are looking at....

    Lets say he makes two payments an disapears, you think that lawyer is gonna go looking for him and make sure the payments are ontime???

    I'd strongly suggest not going this route... Thats just me...

    If he is worthy, there are plenty of credit institutions out there dying to loan people money.... Even people with Jackedup credit get jackedup intrest rates, but they get it...

    If not, somethings might be wrong...
  3. JRAZ

    JRAZ LawnSite Member
    from NW
    Posts: 143

    I would work it like a used car dealership. Get all paperwork legal and legit and have a clause that says if he falls behind one month in payments he defaults on the loan and you get your biz back in full. Kinda like a car repo. Then you can sell your biz again or continue managing it.
  4. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    He doesn't pay, you get it back. Simple. BTW, with a last name like Gotti, I'd hate to be the one welshing LOL :D
  5. bcg

    bcg LawnSite Bronze Member
    from Tx
    Posts: 1,835

    Yeah, you can get it back if he defaults but what if he runs it into the ground and it isn't worth a plugged nickel by then? I wouldn't do it unless he's got something to offer as collateral that isn't going to depreciate in value (like real estate). But then, if he had that, the bank would have made him a loan.

    Don't do it.
  6. JRAZ

    JRAZ LawnSite Member
    from NW
    Posts: 143

    I fogot to add. Get a good chunk of change for a down payment, at least 10,000.00. Almost anyone should be able to get their hands on 10,000.00 one way or another. Credit cards, savings, heloc, whatever.

    Let's say he does run it into the ground, is there some sweet equipment as part of this deal? What is the 80,000.00 price based on?

    Let us know what you do and how it works out. Good luck.
  7. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    20 or 25% down deposit makes sense to me...
  8. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    can i have a loan too? i only need $1 million dollars so i can retire. bank wont give it to me though. payup
  9. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    If you are set on selling him this business, there are other options you could look at. First if he is in for nothing he has nothing keeping him there. Second, why not hire him as a employee. let him run it, you pay him and then after a certain amount of time, he could own it. I would say the reason the bank wouldnt loan him the money is becasue he either had nothing for collateral or they didnt see how he was going to make a living off it and repay a loan for 80k. Good luck!

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