Forums: Discussions for entrepreneurs and small business.

I am trying to put together some rough numbers to judge the fair purchase price of a business we are interested in. We have excellent personal credit and the business would have about $37,000 worth of FF&E for collateral.

7% interest is probably about right, since Fed Funds and prime is down right now. In early 2008, 11%+ would have been roughly the rate you would be looking at.

The term length of the loan will vary, and you might even have options as to how long you have to pay it off: 2, 5, 10 years, etc... This may affect the interest rate and the longer the term, the higher the rate. So, instead of figuring on what is typical, try to figure on what payments you can afford, and consider what the term would be from there.

A fee for a business loan is generally standard, for lines of credit they normally go for about $100 dollars per year. This might be different for your bank or for a business loan.

I`m not sure about the history you have with this bank, but chances are you will have to sign a personal guarantee for the loan. 

Hope this helped. Good luck!



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Motivation for Entrepreneurs
Entre-Propel.com

For planning purposes - use 25% down. 7.5% interest, and unless there is Real estate involved  7 years duration. For a $200,00 loan your monthly payment si $3067

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

RinkRat   I can get you set up with a list of different investors or lenders in your area if you would like.  shoot me a pm and I will help ya out. 

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Kevin Heimlich
Equsion
(949)-429-0175
Kheimlich@equsion.com