An entrepreneur operates a restaurant for 13 years from a leased building in Bristol, CT. The 24-hour restaurant is located on a national highway and grosses about $600,000 annually.
The restaurant owner wanted to purchase the building. The current owner of the building wanted to sell the building and retire and avoid high capital gains taxes. Therefore, the seller wanted a combination of 1031 exchange to lower his initial pay out and tax liability. Banks would only lend up to 65 percent of the value of an asset that is single tenant occupied property. The entrepreneur had funds available to make a 10 percent down payment on the property value. The entrepreneur needed to meet the 25 percent shortfall or the deal would fall through.
Biz2Credit reviewed the financial statements of the restaurant business as well as the personal financial statement of the entrepreneur. Based on the estimated market value of the property and the business and personal tax returns of the entrepreneur, Biz2Credit presented the case as a stated deal. This reduced the required paperwork and accelerated the closing. Also, Biz2Credit recommended that the current owner advance a sellers note to the buyer for 10 percent of asset value over 10 years, carrying an interest rate of prime minus 1. This lowered the current owner's tax liability and ensured a steady retirement income for 10 years. For the additional 10 percent, Biz2Credit helped the entrepreneur qualify for an unsecured line of credit at prime minus 1 against the business. The remaining 5 percent was financed against the business's credit card receivables.
Biz2Credit helped the entrepreneur qualify for an unsecured line of credit at prime minus 1 against the business. The remaining 5 percent was financed against the business's credit card receivables.
"Biz2Credit was the biggest, biggest part of my success here. Biz2Credit came in like a lifesaver," she said
"I'd give Biz2Credit a 15 out of 10. Joe, my funding specialist, does a great job. He's always on point and really understands my business. Every time I've worked with him he's come through for me in a big way
"The turnaround time for funding was quick with Biz2Credit," Raza told us. "As soon as they got our information we had a decision - there was no waiting period like I experienced with other lenders."
Raza and David Bolos