Funding to purchase an existing business

[tcc97]

Dear mentor,

I am considering buying an existing business (Contract cleaning business with established customers base) for 85,000 pounds. I can raise 10,000 pounds and will require the balance via debt financing. What do you think are my chances of getting the loan approved given I have no security available. Thank you.

Regards, Chak.

[Statler]

Hi,

To be honest, you're going to find it difficult to raise £75,000. It may be worthwhile looking for a business angel, or trying to raise venture capital, but you may be better off starting your own cleaning business with the £10,000 you can raise.

If you register online with Shell LiveWIRE at http://www.shell-livewire.org/cgi-bin/register.pl (this is different from registering for the Mentor system), you will be able to download two booklets - 'Market Research for the First Time' and 'Writing your First Business Plan'. You will also be posted a factsheet dealing with your particular business idea (Contract Cleaning).

Good luck with whatever you decide to do,

Lee

[Big Sheep]

I would suggest you look at the accounts of the business and work out why it is being sold and two can you improve it first.

DOes the business make a profit at teh moment, is always a good place to start if you are going to purchase an exsisting business.

Good Luck