I would like to buy a large business that cash flows but I need a lot of money to buy it, where do I start? I could leverage my house?

  • swiftlocal@alien.topBEnglish
    1·
    1 year ago

    All source-of-money is 2 categories: Equity or Debt.

    Debt: SBA loan would be most typical; one of our (marketing) clients: FremontFunding.com does SBA loans.

    Equity: Give up some upside, but no payments directly, no debt-load; spreads risk but limits upside.

    Syndication is common.

    There’s a ton of people lately talking about buying these businesses for zero money out of pocket, but that too carries a cost in one way or another - either increased debt load, or sharing equity.

    For any of you crazy finance guys who wanna talk debentures, convertible debt etc I know there are hybrids, but loosely, it’s all one or the other: equity or debt.

    Debt is easy IF there’s a history of cash flow AND some collateral (i.e. real estate, assets). No assets? no history? no cash flow? no loan, unless you have great credit, then it’s smaller i.e. $150k “credit card stacking” etc. (thought that can work, and often have 0% teasers).