Purchasing an already established business can be a transformative experience for those with a vision of becoming an entrepreneur in order to bypass the initial phases of a new venture that needs time to develop in a sustainable way. However, even if a solution looks foolproof, there is one problem that often comes in between achieving the dream of becoming a successful entrepreneur: funding. Nevertheless, the problem of funding is no longer a concern in the US, as many people use a business loan to buy an existing business to turn their dreams into a reality.
1. From Employee to Owner: Transforming the Coffee Shop
Megan Turner, a barista from Portland, Oregon, heard that her beloved café from her childhood is for sale, and she not only saw a possible opportunity, but she saw the future. Since Megan has experience in the hospitality industry, she knew that her café could easily become a successful venture. What holds her back is that she doesn’t have funds.
She submitted a loan application for a business loan to buy an existing business via a credit union in her locality. She had a great personal credit record with a well-prepared business plan. Her loan agreement had a five-year repayment term with a fixed interest rate that she managed easily by maintaining her sales base and implementing live music sessions on weekends.
Challenges did arise, from supply chain management to seasonal slowdowns, but Megan adapted. “In three years,” she says, “I not only paid off the loan, but I also opened a second location.” Here’s her counsel to others: “Purchasing an existing business is much simpler if one knows the pulse of that business. It is not a purchase of tangible assets only; one buys relationships as well.”
2. A Mechanic’s Leap of Faith: Reviving an Auto Repair Shop
Carlos Rivera had been a mechanic for the past 15 years when he decided to purchase the same establishment that had taught him everything he knew. This is because the owner had decided to quit the business of maintaining vehicles to enjoy his retirement. He had to apply for a business loan to buy an existing business from the SBA in order to purchase a business.
It took some time to process the SBA loan, but eventually, everything paid off. This fund he used to purchase his new venture, and also to set aside a working capital fund. To his disappointment, during his first year of operation, he faced a problem with increased operational costs as well as human resource management. Nevertheless, by introducing new technology in his invoicing system as well as in his loyalty modules, he managed to double his customer retention.
Carlos’ repayment process went smoothly as he had a predictable cash flow pattern and a dedicated clientele base. He added, “The loan gave me ownership, but financial discipline gave me freedom.” As a piece of advice to those asking “How much business loan can I get?”, he urges, “Understand what your credit score is, what your cash flow projections are, what the bank is looking for.”
3. Turning a Family Diner Around: A Story of Resilience
Samantha and Jake Coleman of Ohio chose to buy a family diner that is already 30 years old, which suffered a loss during the time of the pandemic. They chose to revive a beloved restaurant in the community rather than opening a brand-new one. They opted to use a small fast business loan from an online lending service that lends money to businesses in order for a business loan to buy an existing business.
This fast-track approval process enabled them to launch a takeover of operations in a matter of weeks. They had a three-year loan repayment term, with flexible monthly payments tied to their monthly revenues. It was a tough time for the couple, what with old equipment and a slow trickle of customers. However, their marketing campaign on social media and throwback meals turned things around.
By the second year, the number of revenues had jumped by 60%. They cleared the loan ahead of time, apart from starting a catering sector. This is one example of how small fast business loans can act as a lifesaver to businessmen ready to pounce upon favorable leads.
4. Lessons from These Success Stories
Each of these Entrepreneurs utilized a business loan to buy an existing business in a distinct way, even as there are certain lessons that can be repeated in every story:
- Prior planning is important.
- Understand your repayment abilities.
- Leverage relationships.
- Be flexible.
Conclusion
For many American entrepreneurs, a small business loan to buy an existing business represents a sensible way to enter the business arena, where stability meets new possibilities. How successful they can be is plainly evident in the example of Megan’s café business as well as Carlos’s car repair store. By asking yourself, “How much business loan can I get?” SBA loans, as well as small fast business loans, will help guide you in acquiring a successful business via a successful business loan.
