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How much cash down is required?

I am new to the self-employment world and I am looking for some general knowledge and first hand experiences about the amount of cash required to purchase a business. There is a liquor store for sale in California, 489K asking price + 125K in inventory, 744K gross sales, 389K Cash flow. Realistic ball park figure, how much is required to get approved for a loan. Thank you.

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Answers (7)
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hospitality
VP of Operations
New Haven County, CT

One hour away from NYC

Oct 30, 2010
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hospitality
VP of Operations
New Haven County, CT

I am looking for an investor for the liquor business, I want to buy my own, I am director of operations at the store, email me kpatelbusiness@gmail.com. I would manage the place and you will get monthly payments, the store would one hour away

Oct 30, 2010
Harry & Sally Vaishnav
Angel Business Advisors
President
Oakland County, MI

Chris

It depends on whether you are looking banks or private company for financing. Of course with recent economic downturn banks have become very strict about lending. Typically, you are looking at 20% down for this type of business.

If you are looking for help in preparing a Business Plan or performing Due Diligence to analyze the financial statements of the seller we can help with that. Visit our web site at http://www.angelbusinessadvisors.com/services.htm to get more details. We have worked with number of businesses with great success.

Aug 11, 2010
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Biz2Credit LLC
New York County, NY

Chris,

You will have to put 20% downpayment for buying the business. It can be reduced to 15% in case you can get the seller note. Biz2Credit(www.biz2credit.com) can help you to get business acquisition financing. Register for free and chose the case manager option to get started. Biz2Credit has over 100 lenders offering 150 plus lending products.

Aug 5, 2010
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Corporate Financiers
President

Christopher, I am an experienced banker first and foremost (merrill lynch) with an accounting background (u. of MI and Northwestern U). If interested I can assist you with getting a loan. I am an advisor first and intermediary second. Given this is a liquor store, getting financing is likely going to be tricky, though I do not know your personal situation. There is no cost to you for my service (referral fee paid by lender if loan closes). Todd 312-488-3505

Aug 5, 2010
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The BAF Group LLC
MD

I would agree to a large degree with Michael, except to say that many, many small businesses are being sold with Seller financing, because of the difficulty in getting bank/SBA loans. It is a transaction-by-transaction situation. The type of business, the track record of the business and the concrete nature of those records are key, as are your own credit worthiness, your experience and other issues, all come into play. You have given great detail here, but there is still more than any lender would need to know, in order to give you a specific answer.

Aug 5, 2010
Michael Hamlar
Hamlar Enterprises, LLC
Roanoke City County, VA

Christopher,

Congrats on the shift to self-employment. It is very gratifying to take advantage of all the opportunities you will have as an owner. As far as a down payment that will differ depending on the transaction. Most banks on the east cost require 25% down. However, some negotiate and accept as little as 10% down. The only thing about dealing with banks is you will need a business plan put together or some structure of your plans for the new business venture. If you have additional questions feel free to contact us at 1-800-682-1950 ext 101.

Regards,

Michael Lawrence Hamlar
President & CEO
Hamlar Enterprises, LLC
Hamlar Business Broker
P.O. Box 3336
Roanoke, VA 24015
Office: 1.800.682.1950 ext 101
Fax: 1.800.682.1950
Website: www.hamlarenterprises.com
Email: mike@hamlarenterprises.com

Aug 5, 2010

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