How can I secure financing to purchase a business?
Opinions expressed by Entrepreneur contributors are their own.Congratulations on taking a chance with trying to purchase a business. The best opportunities to do this often occur during a recessionary period when many companies are sold at deep discounted prices.
It is also great to hear that you have 20 years of experience managing similar properties. That experience will go a long way when it is time to seek financing. Having very little cash in the bank and fair credit could definitely hinder your ability to obtain financing. But, interested investors may look past that if they believe there is a significant opportunity for financial success.
Have you reached out to any banks for funding?
You may have to go to several regional and community banks to find a lender with favorable terms but it is an option worth exploring. The Small Business Administration also sometimes offers attractive opportunities to obtain financing.
In working with the bank, be as forthcoming as possible regarding your history and your needs. Your banker, in turn, will tell you exactly the information he or she needs to present your "best case" to the bank's credit committee. If possible, use your past success or strengths as a way to market yourself which will help give the bank assurance.
What about seeking strategic financial investors?
This can be a tough decision to make but it is an option worth exploring if you can find an investor (i.e. angel investor) or group of investors (i.e. venture capital fund) that are interested.
In this instance, you will be giving up some equity but these financial investors are generally very helpful. They offer industry expertise and a strong network of contacts which will allow you to grow internally as well as having the opportunity to form strategic partnerships with larger companies.