Matthias Smith: Breaking Down Debt Service Ratios and Business Financing
Mundane Millionaires
Financing a Small Business Purchase
This chapter discusses the first steps for buying a small business and approaching a bank or broker for financing, emphasizing the importance of having a financial package and requesting necessary documents from the seller. It explores the typical deal structure, sources and uses of funds, and the various components that are typically financed. The chapter also covers common expenses that people forget to account for, options for buyers with insufficient capital, and the importance of personal financial statements and cash reserves when securing a business loan.
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