Buying out business partners
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  1. #1

    Buying out business partners

    Merchant is looking for 3-4 million to buy out 1 or both business partners. Business is a nationwide car detailing company doing 500-600k a month with daily balances at 100-200k a month.

  2. #2
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Value doesn't make sense. Price is too many multiples of earnings.

    Have them negotiate a price and have the buyer give them cash plus a note.

    Have the buyer collateralize the note with personal property.

    Make note payments from earnings.

    Terms and payments have to make sense for cash flow and debt service.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  3. #3
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    Quote Originally Posted by Olderguy View Post
    Value doesn't make sense. Price is too many multiples of earnings.

    Have them negotiate a price and have the buyer give them cash plus a note.

    Have the buyer collateralize the note with personal property.

    Make note payments from earnings.

    Terms and payments have to make sense for cash flow and debt service.
    There's not enough information provided to make that evaluation. We have what can be extrapolated to annual gross revenue and average daily bank balances. We can't even say that the sale price is "too many multiples" because we don't know what EBITDA is. We also don't know what if any collateral is coming along with the buyout.

  4. #4
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by Incbiz440 View Post
    There's not enough information provided to make that evaluation. We have what can be extrapolated to annual gross revenue and average daily bank balances. We can't even say that the sale price is "too many multiples" because we don't know what EBITDA is. We also don't know what if any collateral is coming along with the buyout.
    Yes...I'm just guessing with the information provided....and the collateralization of personal property reduces risk to the sellers as a transactional option....don't know if that's available or not. But a $3M to $4M loan on a business doing $5M a year - suggests cash flow and debt service prospective issues.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  5. #5
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Specific SBA lenders who do business acquisition...

    Here are some parameters for business acquisition from one of my lenders:

    Assuming the deal debt services, can finance most CRE purchases at 100% LTV on 7a up to 5MM. They lend based on Prime, but can get aggressive on clean or competitive deals. Have found that a lot of customers will forego a lower rate in order to save on the injection. Rates are case by case, typically 1.0 - 1.5 over Prime, but can get as low as Prime minus 1.50 for the right deal/situation. Have risk-based pricing.

    Can potentially lend 100% on business acquisitions if the buyer is in the same industry, i.e. one company buying a competitor. Otherwise, 90-95% is typical (subject to cash flow), and can get creative on seller notes, gift funds, and outside investors. Rates are generally 1.50 - 2.00 over Prime, lower on exception.

    Max loan amount is 9MM on business acquisitions, including 5MM SBA and 4MM conventional. Have the ability to lend fully unsecured where necessary.

    Closings are 45-60 days, and this lender's process is extremely efficient. Loans are typically approved within two weeks.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  6. #6
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    Quote Originally Posted by chris32111 View Post
    Merchant is looking for 3-4 million to buy out 1 or both business partners. Business is a nationwide car detailing company doing 500-600k a month with daily balances at 100-200k a month.
    You omit many details including your contact info.
    Large spread between $3M & $4M -
    Does the borrower have a contract to purchase
    How much equity (cash) is he placing into the deal

    Many additional questions.
    Dave Lambert, Business Development
    Managed Services Provider
    https://www.tsys.com
    https://www.united-internet.com
    https://www.nmi.com
    dave@fcbankcard.com
    Office: 727-233-1111
    Skype: fc-financial

  7. #7
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    Quote Originally Posted by chris32111 View Post
    Merchant is looking for 3-4 million to buy out 1 or both business partners. Business is a nationwide car detailing company doing 500-600k a month with daily balances at 100-200k a month.
    Chris-Google Car Washes Private Equity. PE funds have been buying up car wash businesses and paying big multiples. Perhaps if you track some of the transactions down, you will identify a potential lender that might have an interest.
    Kevin Henry
    VP-Business Development
    Seacoast Business Funding, a division of Seacoast Bank

  8. #8
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by Kevin Henry-Seacoast View Post
    Chris-Google Car Washes Private Equity. PE funds have been buying up car wash businesses and paying big multiples. Perhaps if you track some of the transactions down, you will identify a potential lender that might have an interest.
    John-Michael Tamburro
    Managing Director | Car Wash Advisory
    495 Brickell Bay Dr, Miami FL, 33131
    www.carwashadvisory.com
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  9. #9
    Have you looked into the SBA 7/a program, we can use it to buy out a partner. please send me more info, and we can get this funded.
    Dustin Tucker
    Midwestern Financial Solutions
    Dustin@midwesternfinancialsolutions.com
    www.midwesternfinancialsolutions.com
    SBA loans - 7A $500k to $7.5m No Minimum Fico Score
    Property Loans- Investment, Commercial, Land, Fix and Flip, New Construction.
    Equity Raises $30M+
    Private Credit $10M+
    Direct Family Office Funding

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