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Looking to acquire a biz but have no cash, only lots of home equity

My home is a coop apt in westchester ny. I have %100 equity in it. Over $300K & I would like to know if I can tap that in anyway to acquire an existing biz? I work full time, but would like to own my own. Helocs are hard to get on co-ops plus the restrictions on what I can buy with it..any suggestions?

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Answers (16)
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Carson Grant Loan Company
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Feb 12, 2017
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Aug 19, 2016
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J Hunter Group, LLC
Lucas County, OH

Ben,

If you are interested in moving I have a Seller Financed Golf Course with live in quarters. With 10-20% down it could work for you.

Apr 11, 2010
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Biz2Credit LLC
New York County, NY

Ben ,

The best way to get a loa is to acquire an existing business and raise loan against that while the bank can place a lien on your home to act as a collateral if your business does not have any hard collateral. That way you will not have to take HELOC and it wll not reflect on your personal credit also.

As regards your equity contribution, in case you have 401k you can redirect it in a self directed IRA plan without any tax liability.

Biz2Credit have over 75 banks and 130 products to match your varied business credit needs across the country. You can fill out a free loan application on www.biz2credit.com and see your options and decide to work with lenders either on your own or through a dedicated case manager from Biz2Credit at a low monthly cost. Once you get matched with a lender, you can use the document management system to upload and maintain all the documents , share it with lenders and other partners you work with. Also being a registered member helps you to get free updates on new lenders ,lending product and tools to build and manage your business credit from our partner, Dun & Bradstreet.

Apr 9, 2010
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Business Capital Corp
President

Do a leverage buyout with the business you want to acquire. You can raise capital and save pledging
your home....or 100% of it. I specialize in hard deals Get in touch with me when you find what you want.
tomboutwell@bellsouth.net

Apr 8, 2010
Satish Patel
Sunbelt Business Advisors
Middlesex County, MA
Premium Broker

You may be able to target a business to buy considering your equity position. Even in this lending environment there are plenty of small business acquisition loans available to qualified buyers for viable businesses. I recommend you meet with a broker in your area to find businesses which meets your criteria and talk to your banker or a small business financing specialist. By understanding what types of businesses you would like to purchase then you will be able to have a better understanding of how much cash you need for the downpayment and how much collateral is required to financing the business. We have a number of preferred small business financing experts we work with we can put you in contact with. Ideally when would you like to buy a business?

Please send me an email or call my office to set up a complimentary consultation.
Mandoni@sunbeltne.com, 617-945-5338

Jun 9, 2009
Steven St
World Business Partners, Inc
Los Angeles County, CA

My entire website is about this one issue. Check it out www.thesmartbusinessbuyer.com

Jun 9, 2009
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Franchise Advisory Group
PA

Ben,

If you have any type of retirement accounts, i.e. 401K or IRA's you could convert them and use the money tax and penalty free to buy a business. Please contact me and I will put you in contact with the company that does that. david@franchiseadvisorygroup.net

Jun 8, 2009
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Sharp Business Opportunities
San Diego County, CA

Interesting string. It takes money to buy a business. TYes, there are motivated sellers that want out. A banker recently recommended putting in an offer with a balloon payment due in six months. In other word take over the business (early possession) assuming all liabilities while getting the financing in place. Of course this can turn into a disaster but I can see the possibilities. Never think you can pick up a business for free or next to nothing without putting a lot of time and money into the business. You can buy a business for a lot less than it would cost to start from the ground up but if you have no money you will be in the same boat as the previous owner.

Jun 6, 2009
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How to Buy a Business
WA

This is a quick read on how to buy a company with no money down.

Jun 6, 2009
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Westchester County, NY

Thanks for the article Mike. Interesting read, sounds like it could be a tricky strategy. Been doing allot of research and think that the cash out refi to buy a biz flat out, or a deposit on an owner financed biz might be the answer for me. Also Ms. Orr mentioned that I could do some other deals if there was real estate in the trans and I could provide a % in cash. I always believe in you get what you paid for, so I know that I must pay something in some way at some point :)

Please keep the suggestions coming!
Best rdgs

Jun 3, 2009
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Inc. Magazine
Deputy Editor
NY

Check out this blog post from Atari founder Nolan Bushnell on how to acquire a company, in essence, for nothing down. It takes bravado, but it can be done in an environment such as this one.

http://blog.inc.com/nolan-bushnell/2009/05/how_to_acquire_a_company_for_f.html

Jun 3, 2009
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Chemung County, NY

DO NOT SELL THE APT!!! You have take years to build up the equity I'm sure. Don't risk it all on a business that may or may not succeed! Find a business with owner financing with little down and ease into it. Don't bet the farm!

Jun 2, 2009
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Westchester County, NY

Thanks Guys. I thought about selling, but I love where I live so I will NOT do that.

What are your thoughts of a Cash Out Refi & using those proceeds to buy a biz? There are Helocs that I can get and I can borrow against the co-op , but I was just wondering if these choices make sense, and have been used before?

I do agree that Seller financing would be ideal for me. I can back my debts with apt as collateral.

I have worked in many industries, and would be highly interested in a Conv. Store, Liquor Store, or even a Car wash.. something that I can grow (any sellers out there in NY {Westchchester, Rockland, or NYC} interested in doing a deal with me??). My business & professional experience is extremely broad. I am currently a Business Analyst at a major firm who is itching to show the world how to run an efficient, clean , and profitable business.

Anyone have any other ideas of financing, or even a biz they would like to sell me, please respond. I will figure out how to contact you.

May 29, 2009
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The BAF Group LLC
MD

Your question is not one of right or wrong, but in style and priorities. Mr. Metzger is not wrong! But I tend to be more conservative. With 100% equity, even if you cannot borrow against it, you are in position to live very cheaply, it would seem. So, you have the potential ability to survive financially while you build or buy into a business. Others, who are burdened with costly mortgages are not so lucky, or cannot even think of making that kind of move.

I would think about borrowing and begging from friends and family, and looking for businesses that could be financed by the Seller. Depending upon the business and the price, the SBA is still a fair source of funding.

Again, Mr. Metzger is not wrong. With over $300k to potentially invest in a business, you could command a sizeable acquisition. On the other hand, what is your level of business/professional experience? If you are a complete novice, do you want to shoot the whole wad, on your first stab? What kind of business could you obtain, that meets your background?

Think about it long and hard, before selling the co-op and plunging in too quickly and too deeply.

May 29, 2009
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T.L. Metzger & Associates, LLC
NY

Sell the coop apt. rent an apartment and invest the proceeds in a existing business.

May 29, 2009

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