loan to buy former LCO??

Discussion in 'Business Operations' started by henri4207, Dec 26, 2005.

  1. henri4207

    henri4207 LawnSite Member
    Messages: 35

    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!!
  2. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    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.
  3. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,282

    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.
  4. Mower For Less

    Mower For Less LawnSite Senior Member
    Messages: 823

    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.

  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Messages: 1,912

    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'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 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'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
  6. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Messages: 4,771

    More than likely they will want a very well prepared business plan, the lender that is.
  7. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    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
  8. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,282

    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.
  9. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    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
  10. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    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?

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