Psst! If buying a business has ever crossed your mind, don’t skip the bottom of this email. We’re giving you something free that might come in handy.
It loses a little something in translation, but the point is pretty damn useful:
Things tend to run better when the owner is actually paying attention.
And right now, we’re watching that idea play out in a $1.9 million hotel acquisition in downtown Philadelphia.
The current owner is 72, has moved to the West Coast, and is heading toward retirement.
The buyer? Local. Experienced in the industry. And planning to actually be there.
Same building. Same rooms. Same tiny shampoo bottles. Very different operating model.
When people look at buying a business, they usually start with what already exists:
Revenue. Profit. Assets. Customers. Employees.
Obviously important. But a smart buyer should also ask:
Maybe expenses have gotten sloppy.
Maybe customers aren’t being followed up with.
Maybe pricing hasn’t been touched in years.
Maybe there are opportunities sitting right there because the current owner simply doesn’t have the time, energy, or desire to chase them anymore.
That doesn’t necessarily mean you’re buying a broken business. You may be buying a perfectly good business with room to get better.
You still have to buy the damn thing.
And lenders don’t just look at the business.
They look at **you. **Your experience. The company’s performance. The purchase price. Cash flow. Debt service. Your plan after closing.
Because “I’ve always wanted to own one of these” may be emotionally compelling, but it is somewhat less compelling to an underwriter.
We break down the Philadelphia deal and the owner-operator advantage in business acquisitions on the Credit Banc blog.
Not metaphorically.
A while back, we wrote * Buying the American Dream*, our playbook for finding, buying, and growing a small or midsize business.
The basic premise is pretty simple: You don’t necessarily have to start a business from scratch to become a business owner.
Sometimes the business, employees, customers, equipment, and cash flow already exist. You just have to find the right one and figure out how to buy it without doing something financially stupid.
The book walks through the process from finding opportunities to evaluating them, financing the purchase, taking over, and growing what you bought.
You can buy a copy on Amazon here.
But if you’re already subscribing to this newsletter, we figured we should do something nicer than tell you to go spend money.
GET YOUR FREE COPY OF BUYING THE AMERICAN DREAM
Consider it our contribution to either your future business empire or several hours of aggressively judging businesses for sale online.
And if you’ve already moved past the browsing stage and found a business you’re seriously considering buying, Credit Banc can help you figure out how to fund the acquisition.
We work with buyers on ** SBA and conventional business acquisition financing**, including structures that may also cover working capital, equipment, inventory, renovations, and even owner-occupied real estate as part of the deal.
Depending on the transaction, financing can potentially reach up to $10 million with repayment terms as long as 25 years.
The key is figuring out what the business can actually support, what you qualify for, and how to structure the deal before everybody gets emotionally attached to a purchase agreement.
Because finding the right business is hard enough. Paying for it shouldn’t be the part you figure out last.
Until next week,
Credit Banc works with 100+ lending partners across conventional, SBA, bridge, owner-occupied, investment property, and other commercial real estate financing. Explore your options at creditbanc.io
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