[skideeppow]

So,
Have a merchant who is looking to purchase a long established restaurant and he needs 60k at closing (obviously there are time of ownership issues here since he will not take ownership till closing).

Any one doing deals where we can underwrite them based on current processing and bank statements, and then fund them at closing? Underwriting would be based on the new owner.

I hope that made sense.

[cashguy]

How much equity is the new guy bringing to the closing.

[MCNetwork]

If you find a lender who will do this, let us know. I've never seen it happen unless the previous owner agrees to sign all the loan paperwork and not tell the lender he's selling the place. Once a new owner takes over, the previous months of sales activity is not really applicable. The new owner can drive the place to the ground.

[Eric S]

If you find a lender who will do this, let us know. I've never seen it happen unless the previous owner agrees to sign all the loan paperwork and not tell the lender he's selling the place. Once a new owner takes over, the previous months of sales activity is not really applicable. The new owner can drive the place to the ground.

If you broker the deal knowing the ownership is changing you'll be in breach of your ISO agreement and risk getting cut off.

[OldFundingHound]

Ditto on all of the above. It's not really the intended use for a cash advance product. That deal gets done as an SBA loan all day long, and he's going to need some of his own funds/equity... 'skin in the game' to do the deal legit.

[MCNetwork]

If you broker the deal knowing the ownership is changing you'll be in breach of your ISO agreement and risk getting cut off.

Of course I would never knowingly broker this deal but some of my less scrupulous brethren might be tempted

[Eric S]

Of course I would never knowingly broker this deal but some of my less scrupulous brethren might be tempted

Yeah, well we've all accidentally brokered a fraud deal too. It's a bummer when it happens.

[Chambo]

So,
Have a merchant who is looking to purchase a long established restaurant and he needs 60k at closing (obviously there are time of ownership issues here since he will not take ownership till closing).

Any one doing deals where we can underwrite them based on current processing and bank statements, and then fund them at closing? Underwriting would be based on the new owner.

I hope that made sense.

I've done this before when....

1) previous owner signs on as guarantor
2) you provide a copy of purchase agreement
3) all usual data needed for submission is sent (bank, CC, P&L, etc)
4) usually the resume of the new owner is required too (want to make sure the new guy actually knows how to run the business, has experience, etc)

[JayBallentine]

I've done this before when....

1) previous owner signs on as guarantor
2) you provide a copy of purchase agreement
3) all usual data needed for submission is sent (bank, CC, P&L, etc)
4) usually the resume of the new owner is required too (want to make sure the new guy actually knows how to run the business, has experience, etc)

Chambo,

We will be running into a lot of those situations. Will you take more of these referrals so long as the overall quality is good?

[Chambo]

Provided they meet and are willing to come in (both owners) with the above listed criteria

[CO1]

Chambo; What company do you represent?

[skideeppow]

he is bringing 260k to the table. I know about the fraud clause. And i also know that the old owner would have to sign off on all the docs, like an owner finance deal.

[jbrown]

Rapid has done these deals. They are riskier and require a more thorough underwrite. The key is how much cash does the buyer put in. Too many of these deals the new owner is just taking over with payments from cash flow.

[JayBallentine]

Rapid has done these deals. They are riskier and require a more thorough underwrite. The key is how much cash does the buyer put in. Too many of these deals the new owner is just taking over with payments from cash flow.

Who would be the best person in your org to discuss this with?