One of my clients needs to buy out a partner who owns a third of his business. The business is valued at $3 million dollars, so the total buyout amount is $1 million.
We can offer our client an SBA loan for the transaction. The loan would amortize over 10 years at a variable interest rate of 10 percent. There is a monthly payment of $13,215. Because the loan amount is over $500,000, the lender will require a lien on my client’s home. There is no prepayment penalty.
The thought of this loan paralyzes my client. He is highly risk-averse and has never had debt before. He does not like the idea of owing the bank money, and he is petrified of putting a lien on his house. So, my client has come up with another plan. Check out my latest 21 Hats column today to keep reading!
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