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Thread: small business loans

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    small business loans

    Hi All,

    Can you please tell me what you would recommend in the following situation.

    My husband and his friend have members shares in a company, they want to buy the other member's shares out. What would be the best way to go about doing this.

    The business is a butchery (it is registered as a CC) and they are paying him every month an agreed upon amount to pay off his shares (this is going to take them a long time to do), but they do not want to do this anymore, they want to pay him out the balance of his shares once off so that they can carry on with the business on their own.

    Would a small business loan be the way to go as they want to expand as well as the premises are too small as well and the only way they can do this is with financial help.

    Tanks,

    Anita

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    Site Caretaker Dave A's Avatar
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    I've got to ask - If the guy selling his interest is prepared to take instalments, why waste your access to credit or capital paying him out early?
    The trouble with opportunity is it normally comes dressed up as work.

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    Hi Dave A,

    The problem is, is that he has control until we have bought his shares and this is holding us back. We have so many ideas that we can not implement until we have bought out his shares. we could do so much better without him in the picture and we can not wait to get going. We want to make our future now and not in about 3 years time.

    Thanks,

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    Site Caretaker Dave A's Avatar
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    You're probably going to need to buy him out from finance raised in your personal capacity then. Second bond, personal overdraft, revolving credit facility, loan against life policies...

    BTW - have you got a written agreement on this buyout? I'd get pretty peeved if you get to the end of three years only to find your seller has changed his mind, or is off to set up his own business in competition etc.

    I'd be far more comfortable were this an instalment sale agreement and you got transfer now, with the interest in the business and material assets held as security against your default. Only transferring ownership at the end could make things complicated.
    Last edited by Dave A; 11-May-09 at 04:58 PM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by A BUTCHERY View Post
    Hi All,

    Can you please tell me what you would recommend in the following situation.

    My husband and his friend have members shares in a company, they want to buy the other member's shares out. What would be the best way to go about doing this.

    The business is a butchery (it is registered as a CC) and they are paying him every month an agreed upon amount to pay off his shares (this is going to take them a long time to do), but they do not want to do this anymore, they want to pay him out the balance of his shares once off so that they can carry on with the business on their own.

    Would a small business loan be the way to go as they want to expand as well as the premises are too small as well and the only way they can do this is with financial help.

    Tanks,

    Anita
    Hi
    What amount are we talking about?

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    HI Quinn,

    The amount in question is R400 000.00. We have signed the contract stating what shares we have in the business and that we are buying him out at R..... per month until his shares are paid, if we want to buy him out. The contract states how much each members shares are (in rands and %), we have the legal documentation for the shares that we have paid so far. We are registered on the CC as members and our % shares.

    Cheers,

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    Do you own any residential property?

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    I couldn't help thinking of this thread when I read this story.
    Despite the global credit crunch, Business Partners - a specialist financing company - has just earmarked R900 million to support small and medium-sized businesses.

    The funding is to help this key economic segment during the current financial year and comes at a time when there is a marked drop in accessing credit, particularly for smaller businesses that typically struggle to secure funding.

    Gerrie van Biljon, Business Partners' executive director, told a group of business people in Durban last week that surviving the recession meant having a business when the upturn arrived.
    full story from Business Report here
    The trouble with opportunity is it normally comes dressed up as work.

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    IDC gets R50m facility from China Construction bank

    The Industrial Development Corporation of South Africa Limited (IDC) has received a USD 50m loan from China Construction Bank (CCB)-Johannesburg Branch Chinese state-owned bank with offices in Sandton, Johannesburg.

    Full story here: http://www.moneyweb.co.za/mw/view/mw...1710&sn=Detail

    Good news as SA' banks are tightfisted at present....

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    R400 000.00 is a lot of money for a part share in a butchery . What type of turnover are you doing / month

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