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The following Information and Links can be helpful in exploring
options to finance the purchase of a business.
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| Financing Information & Links |
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Determine how much personal cash you have available:
Many business sales are seller financed if you have a reasonable down payment.
You will also need a little extra to cover initial business expenses (lease transfer,
utilities, new business license, etc...). In most cases you will need at least $20,000
for the down and about $5,000 for the other expenses depending on the size of the business.
Look at your savings, any stocks or bonds you might have, or maybe sell any unused big
ticket items you no longer use such as vehicles, etc....
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Approach family and/or friends:
If they are interested, it would probably be best to involve them in any meeting you have
with us when you are looking at various businesses. That way, they will be well informed
and more inclined to support your venture. To show them you are serious, you should have
a well thought out plan as to how you will operate the business. Write a business plan.
Writing a business plan will also open your eyes to things you may not have thought about
in operating a business.
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Personal loan:
Most banks offer some type of personal loans. Some are very restrictive and
have a cap of $5,000 - $15,000. Other banks can offer more, it just depends on
your credit history. Begin with the bank you normally do business with.
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Home equity loan:
In general, home values have been increasing for a while now. If you've owned your home
for at least a year it might be worth exploring. Many are concerned about tying up their
home equity, however, if you get an SBA loan, the SBA will put a lean against your home
equity and any other assets you have.
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SBA loan:
Many banks in Utah offer SBA loans and it is best to find one that is a Preferred SBA Lender(see below).
These banks can approve your loan in house instead of forwarding the loan package to the SBA for approval.
The SBA loan package is very extensive and besides your own personal information you will need to provide
them all the information on the business you are attempting to buy. Follow this link for a full
explanation on SBA Loans
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Business plans:
Free assistance is available at Weber State University
and the
Ogden Business Information Center.
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Interest Rates:
Get the latest information on interests rates at www.BankRate.com
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Credit Scores: Learn all about credit scores at www.MyFico.com
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Credit History:
Once a year you can get a free credit report by law from all three of the main credit
reporting agencies (TransUnion, Experian, and Equifax) at www.AnnualCreditReport.com
(Note: Do Not go to FreeCreditReport.com, it is not really free!)
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Utah's Preferred SBA Lenders
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If you already bank at one of these institutions I would start there. Otherwise, browse
each one to see what they have to offer. Once you are at their site, click on
"Business Banking", "Small Business", "Loans", or something similar to get started.
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America West Bank - www.americawestbank.net
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Bank of American Fork - www.bankaf.com
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Bank of Utah - www.bankofutah.com
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Chase - www.chase.com
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Far West Bank - www.farwestbank.com
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First National Bank of Layton - www.fnbutah.com
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Silver State Bank - www.silverstatebank.com
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U.S. Bank - www.usbank.com
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Key Bank - www.keybank.com
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Wells Fargo - www.wellsfargo.com
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Zion First National Bank - www.zionsbank.com
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