Dedicated Employee Buys Business from the Boss

An aspiring entrepreneur had managed a local auto parts store since 1985. To reward the client for his hard work, loyalty and commitment, the owners offered to sell him the business in 2000. The client came to the center for assistance with funding options for purchasing the business.

The client’s relationship with the center’s staff grew and evolved over the next four years that were required to make the client’s dream a reality. Originally the client was attempting to purchase just the business inventory and assets without the building and with very little money available for down payment. No banks were interested. Eventually the sellers agreed to sell the building along with the inventory and assets. Still no banks were interested. During this time period the store also changed to a new major vendor. The client continued to search for a bank that would agree to finance some portion of the purchase price. Finally one bank agreed to do a SBA Guarantee Loan for a part of the deal. The client was able to get his new vendor and the sellers to finance another portion of the deal while he and his family agreed to provide the balance. The client used the center’s services to develop a business plan and make adjustments to the plan each time circumstances changed. The client’s persistence paid off.

After four years of exploring numerous financing options, the client was finally successful in purchasing the business. The client was able to finance the $225,000 purchase price by obtaining a $150,000 SBA Guarantee Loan from a local bank, vendor credit financing of $15,500, seller financing of $42,000, and owner investment of $17,500. These funds helped retain seven existing jobs.