Business loan

[james start]

Hi there

I couldn't find the exact answer on google so I'll try my luck here

I want to buy a bar/restaurant/cafe (I realise financing this is difficult but I have alot of experience)

The cost is 180k and is ATM slightly profitable

How do I get a loan for this?

I have 2 ips worth 540 and loans are 400

Would I need more equity to secure a business loan?

Could i secure half with property and half with the business? Chattels etc?

Any advice would be good
Thanks

 

[Terry_w]

Hi there

I couldn't find the exact answer on google so I'll try my luck here

I want to buy a bar/restaurant/cafe (I realise financing this is difficult but I have alot of experience)

The cost is 180k and is ATM slightly profitable

How do I get a loan for this?

I have 2 ips worth 540 and loans are 400

Would I need more equity to secure a business loan?

Could i secure half with property and half with the business? Chattels etc?

Any advice would be good
Thanks

Think from a bank's point of view.

Will you be quitting your job to run this?

What is the security for this? Generally only something tangible is of value to a bank - land and sometimes some other items such as fixtures and fittings.

does the business include anything you could borrow agaist such as kitchen equipment?

Maybe get as much as you can out of the properties and then a personal loan. Ask for vendor finance for the rest.

 

[Shahin_Afarin]

You will need but not limited to:

1. Business plan
2. Cashflow projections prepared by accountant
3. Full financials of the business you are purchasing
4. Lease agreement/details

You will also need to provide extensive commentary around staff rostering, your level of involvement in the business, etc.

Max LVR would be 50% of the purchase price and rates would be dependable on a number of factors but see to factor around 8.5% - 9.5%. Fees would be around $5k.

Get yourself a gun accountant and get him to review the financials and cash-flow projects and comment accordingly on the business profitability. A lot of businesses for sale are crap.

 

[james start]

Max LVR would be 50% of the purchase price and rates would be dependable on a number of factors but see to factor around 8.5% - 9.5%. Fees would be around $.

Thanks, this what I really need to know

Max lvr of what? The business? So I need 90k of equity or cash for a 180k business?

Can I use my equity from the below scenario?

540 val 40o loans? Will banks secure up to 90%? On my ips?

Thanks so much

 

[Shahin_Afarin]

LVR of the purchase price of the business.

Yep $90k would need to come from you (can of course come from an equity release against existing property).

Yep you can use equity against property but don't cross securitise (the bank will want you do this of course) so just do a separate equity release against your properties. Depending on who your current bank is, some will be ok with this and some won't so just plan for this.

 

[Shahin_Afarin]

BTW not many lenders will do business loans - the only mainstream that are good for these types of loans are ANZ. Servicing needs to be strong even for ANZ commercial loans.

 

[james start]

Thanks for the replies, this has really helped

 

[Qlds007]

Disagree i believe you could almost fund the entire amount using a combination of equity and the business as security.