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When buying a home based business that will not include commercial property, borrowers should realize that business loan options will be significantly different when compared to a business purchase which might be acquired with a commercial property loan. This problematic situation occurs due to the normal absence of commercial real estate as collateral for the business enterprise financing when buying a home based business. In serial entrepreneur of arranging the business enterprise loan, efforts to buy a small business opportunity are almost always described by commercial borrowers as excessively confusing and difficult.

The comments and suggestions in this report reflect business financing conditions which are frequently offered by substantial lenders willing to give a business loan to buy a small business opportunity throughout most of the United States. There are apt to be circumstances when a seller will privately fund the acquisition of a business opportunity, in fact it is not our intent to address those business loan possibilities in this report.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a HOME BASED BUSINESS – Length of Business Financing to Anticipate

Business financing conditions to buy a business opportunity will most likely involve a reduced amortization period in comparison to commercial mortgage financing. A maximum term of ten years is typical, and the business loan is likely to need a commercial lease equal to the length of the loan.

HOME BASED BUSINESS BUSINESS LOAN STRATEGIES:

Expected Interest Rate Costs for Buying a Business Opportunity

The likely range to buy a business opportunity is 11 to 12 percent in the present commercial loan interest circumstances. This can be a reasonable level for business opportunity borrowing since it isn’t unusual for a commercial real estate loan to be in the 10-11 percent area. Because of the insufficient commercial property for lender collateral in your small business opportunity transaction, the cost of a business loan to get a business is routinely greater than the cost of a commercial property loan.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Down Payment Expectations to get a Business Opportunity

A typical deposit for business financing to buy a business opportunity is 20 to 25 % depending on the type of business and other relevant issues. Some financing from the seller will be considered helpful by a commercial lender, and seller financing might also decrease the business opportunity deposit requirement.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Refinancing Alternatives After Buying a Business Opportunity

A crucial commercial loan term to expect when acquiring a business opportunity is that refinancing home based business financing will routinely be more problematic than the acquisition business loan. You can find presently several business financing programs being developed that are more likely to improve future business refinancing alternatives. It really is of critical importance to set up the best terms when purchasing the business and not rely upon business opportunity refinancing possibilities until these new commercial financing options are finalized.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a Business Opportunity – Lenders to Avoid

The selection of a commercial lender might be the most important phase of the business financing process for investing in a business. An equally important task is avoiding lenders which are struggling to finalize a commercial loan for buying a business.

Through the elimination of such problem lenders, business borrowers will also be in a better position in order to avoid many other business loan problems typically experienced when investing in a business. The proactive approach to avoid problem lenders might have dual benefits since it will contribute to both the long-term financial condition of the business enterprise being acquired and the ultimate success of the commercial loan process.