Entrepreneurialism
Buy A Business Worth Ten Million Dollars-Using This Rare Financing Secret Nobody Talks About
Although I talk a lot about buying businesses using investor financing -- as opposed to using banks, lenders, relatives or government financing -- there is another way (besides investors) I sometimes recommend. And that way is simply financing the business's assets. Something most people think is only doable with smaller businesses, but is actually doable with larger businesses as well.
In fact, back before I stumbled onto investor financing and we were buying larger businesses, the same size we?re buying now, we financed those businesses with the assets.
Here's how it works: When you?re financing assets -- and this is especially practical with manufacturing businesses, because they have equipment -- you have accounts receivable and you have inventory. A lot of times you can go in on, say, a $10 million deal, and tell the owner you're going to give him $2.5 million down, and have him carry back the financing.
And then, all you do is go out and borrow or lease back your assets. This way, even though you have financing on the rest, on the equipment, you still have 50% of the cash flow left. In fact, a good rule of thumb is 50% or you don?t do it.
Bottom line: If you're looking for different ways to finance a business, financing the assets is still a totally legitimate option you can do on your own if you can?t find or work with investors.
Arthur B. Hamel has bought over 200 businesses in the past 50 years, and is a well-known author, consultant, investor, business owner, and dynamic lecturer who has shared the stage with such business greats as Robert Allen of "No Money Down" fame. For the past 20 years Art has taught thousands of people around the world -- even so-called "little guys" with no formal education or money -- how to quickly and easily buy large, multi-million dollar businesses with no credit, banks or prior business experience. He has recently decided to share his unique business-buying secrets and tactics free of charge at: http://arthurhamel.com
Art Hamel
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