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How can a first time buyer come up with the funds to purchase a business since the banks are not lendingIs own

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The BAF Group LLC
MD

Banks, through the SBA are lending. It is tough, but certainly not impossible. It depends on a lot of things, and in particular, your own experience, credit, the kind of business and the business' history. If you are talking about Barber Shops abd Beauty Salons, it is much tougher, for several reasons. First, because the Owners have no hold on the Staff, which can take their books and move wherever they like, leaving the Buyer with a note and no business! Second, because it is a classically, service-oriented business, meaning there is little in the way of intangible assets to use as security. (The equipment in such businesses has almost no value, once it is put in use for the first time.) Third, because it is frequently a cash business, so that most of the income is untraceable, unless it is a franchise that has elaborate tracking mechanisms in place.

Therefore, the Seller would need to take a note. And the Sellers - if they are reasonable and at all knolwedgable - know this. Or, they need to know this.

Apr 19, 2011

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