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Business Acquisition Loans
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Purchasing an existing business is an excellent opportunity for many individuals to achieve employment independence. Most business acquisitions combine a variety of loan purposes, such as inventory, equipment and working capital or perhaps equipment, inventory and commercial real estate. These types of loan combinations are very typical in a business purchase, all of which can be placed into "one" business acquisition loan.
Loan amounts range from $5,000 to $300,000. However, RREDC will consider a "participation" with a third party (i.e. the seller or another financial institution seller).
Note that the loan amount can exceed $300,000 in certain cases though the use of the Headwaters Loan Fund.
The term for a business acquisition loan will vary, depending on the type of business and what is being purchased. For instance, if the majority of the business purchase involves commercial real estate, then a 20 year term may be appropriate. However, if the business purchase is purely inventory and equipment, then only a 5 or 10 year term may be necessary.
Interest rates are fixed and depend on the overall risk of the business and/or project.
RREDC can finance up to 90% of the overall project cost on business acquisition loans. Therefore, the remaining 10% of the project cost must be in the form of an equity contribution by the borrower. This contribution can be in the form of cash, investment or financing by an independent third party (lender, friend, or family member).
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| RREDC 520 E Street, Eureka, Ca., 95501
Phone: 707-445-9651 FAX: 707-445-9652 | |
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