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Clarifications on down payments and such

If I have great credit but few assets- lease my current car and don't own a home, for starters- esp. ones that are worth "a lot" and very-little to 'put toward a down payment' from my personal savings, is there still a chance, or am I SOL with regard to buying a business? :( Does the down payment have to be directly-from some kind of savings the buyer has initially, or can it be part of a final loan to buy a business? I'm fairly-certain of the answers to these questions, but I want to be absolutely sure. ...Maybe my best bet is to buy a franchise? Lastly, when it comes to NDA, in the part that mentions down payments and purchase, particularly the rectangle preceded by a dollar sign, if one is pre-qualified for a loan that matches the asking or purchase price, can the buyer list an amount equivalent to the purchase price prior to signing, or would one need to specifically list *money they have/had access to prior to/regardless of any loan*?

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Aug 17, 2017
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The BAF Group LLC
MD

I would never say never, because there is something that invariably happens go change things. But getting a 100% loan is like hitting Lotto. That is about a 27 million to one shot against winning. No Broker or Seller is going to take you seriously, if you try to sell that in an NDA.

As for what the Seller cares about: Cash is always key, regardless of the source.

Dec 6, 2016
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Tying that into my next question

If one *were* to, for example, get a loan that covered basically "all" of the purchase price with no initial down payment, what would they put down on that part of the NDA? Just the initial purchase price listed on the original description for the sale?

Or is it 'imperative' that I obtain a down payment in some form or another, in addition to a loan or seller financing for the rest?

Dec 6, 2016
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I'll try to rephrase my questions, Don (and anyone else who is reading this and wants to chime in)

I get that, when applying for a loan, most of them typically will ask for a down payment, but what if one *does* happen to get, say, an unsecured loan and get all or nearly-all (I think) of 'what they need' in terms of purchase price in a loan prior to finalizing the deal? As rare or as unlikely as it may be, if a buyer *were* to get a loan to finance the transaction 100%, would it matter to the seller all that much that all of it is a loan obtained by said buyer (as opposed to, say, a combination of a loan and down payment from buyer's own savings), or are most sellers generally "ok" with that as long as it's paid, in general?

Dec 6, 2016
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The BAF Group LLC
MD

Brandon, you has a LOT of question. But first, pay no attention to the "mortgage" company answering you. If it is a mortgage company, they have no business being in the commercial lending venue, and they did not answer your questions, so they are not to be believed.

Any lender is going to want you to have "skin in the game". Part - but only part of your down payment can be loaned by the Seller. But you then have to be darned careful that the business will carry payments for the entire amount borrowed.

If you do not have the money, it does not count you out of buying a business. It simply may delay it until you can get the cash together. What about an investor? A partner?

And no, you cannot get the down payment from the loan proceeds.

As for the NDA, answer what they ask. If you are qualified for a loan of that amount, how did you get the down payment for the cash the lender would want, in order to qualify you? Your question does not really make sense. But I will tell you that as a Broker, if I ask a specific question and the Buyer refuses to answer, I do not deal with that Buyer. If I represent a Seller, and the Buyer will not answer, or not answer honestly, how am I to provide him/her with private information about the Seller, with any confidence?

Finally, on franchises, you will run into the same issues, with respect to borrowing. Again, partner? Investor? Saving money over time?

Anyone that tells you different is not saying things in your best interests.

Dec 6, 2016

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