Creative Business Financing?? - Posted by Jason Bailey(FL)

Posted by Jason Bailey(FL) on August 31, 2001 at 14:14:05:

Thanks for the response. That is kind of what I had in mind, but my main concern is that the current owner would object to the sale/leaseback idea. Am I obligated to tell them about my ideas, or would that be considered unethical/illegal? The figures are(approx.): Gross per year 937K, Assets are at 187K, which includes FFE, lawn equipment, trucks, etc. Most of the lawn equipment is fairly new. Asking price is 575K. Owner Benefit(Net) is stated at 230K, and they say they can verify all figures. I figured I could 85 to 90 percent back for the equipment sale/leaseback, and for the Down Payment. I am more than willing to put in my own money, I just don’t have enough for this business purchase(yet). Any other ideas or comments are appreciated, or leasing companies to call, etc., and if you need any other info, etc. I will provide it if I have it…thanks again…


Creative Business Financing?? - Posted by Jason Bailey(FL)

Posted by Jason Bailey(FL) on August 30, 2001 at 21:37:06:

I have been learning from this site now for months, and have a few creative RE Deals under my belt. However, I have thought about purchasing an existing business in the area as well. It’s a lawn care company. I was wondering this - how can I creatively purchase this business, or is it even possible? I have thought about using the assets, then doing a sale/leaseback of the assets through a leasing company, and some of my own equity, but that’s not quite enough for the purchase price. Anyone who has experience or info, post here, or emails to me are most appreciated. Thanks in advance, and I appreciate any ideas or information…

Re: Creative Business Financing?? - Posted by Ed Garcia

Posted by Ed Garcia on August 31, 2001 at 09:50:23:


Your on the right track about doing a sale-leaseback on the equipment, however you don’t tell us the about the equipment inventory, or numbers, so there is no way for us to know.

Remember, The main value of this business is the blue sky, or good faith value such as the customer base, reputation of the company, how long they have been in business and established, etc.

You could put the deal together by doing the equipment sale-leaseback for the down payment, and a seller carry-back for the balance. If the seller is not happy to carry because you did the sale-leaseback on the equipment, then you could collateralize it with a second on one of your properties.

Just food for thought,

Ed Garcia