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Old 06-09-2006, 09:38 AM   #1 (permalink)
 
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Smile Need help on selling our tanning salon please

Good morning, I am looking for some advice on selling my salon. We have it on the market in our small town and I feel as though we have it priced fairly right.$65,000 for a 8 bed salon 2200 sqft. with room for 3 more beds.
Last week a couple that lives here took a look at our salon and liked it. They are coming back for a second look and want to go over some numbers for the bank.

They told my Realtor that they are looking for financing at their bank but seem to be having a problem with the bank because one: the bank doesn't no much about giving a loan for a tanning salon business and 2nd the bank wants to know what equality is in the tanning beds.

Honestly tanning beds are like cars you take them out of the show room and they start loosing their value.

What are some of the things I can tell these people to help them secure a loan at their bank?
I am going to suggest a business plan and was thinking about giving them ours to use and rewording it.

any suggestions to tell these people would be helpful

thanks
John & Elaine
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Old 06-09-2006, 10:39 AM   #2 (permalink)
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Re: Need help on selling our tanning salon please

Do you own the building? If so, go at it from that angle....
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Old 06-09-2006, 10:46 AM   #3 (permalink)
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Re: Need help on selling our tanning salon please

Banks don't like doing loans on tanning salons unless property is invloved or something can be put up. If you walk in wiht a well thought out business plan you have much better chances.
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Old 06-09-2006, 12:19 PM   #4 (permalink)
 
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Re: Need help on selling our tanning salon please

SBA and city Gov'ts usually have low interest loan aid for small businesses.... try that....

FYI you can also finance the purchase. Find out how much they can pay up front, and then have an acct or lawyer draw up the paper work for them to pay you $X a month for the next 3-5 years.
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Old 06-09-2006, 12:28 PM   #5 (permalink)
 
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Re: Need help on selling our tanning salon please

If they own a home, they can get a 2nd mortgage or equity line of credit. We purchased our equipment by getting an equity line. Best interest rate we could get and no hassle getting it :)
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Old 06-09-2006, 12:29 PM   #6 (permalink)
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Re: Need help on selling our tanning salon please

Home Equity Line Of Credit

Prime Plus 1% is a good rate.
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Old 06-09-2006, 12:32 PM   #7 (permalink)
 
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Re: Need help on selling our tanning salon please

Quote:
Originally Posted by glotan

FYI you can also finance the purchase. Find out how much they can pay up front, and then have an acct or lawyer draw up the paper work for them to pay you $X a month for the next 3-5 years.
Just make sure that if they miss payments you get the salon back without any bs. No refunds. Etc.
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Old 06-09-2006, 01:01 PM   #8 (permalink)
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Re: Need help on selling our tanning salon please

Agree with all - the bank wants to do an "asset only" purchase, not purchasiung the business.

Make a COMPLETE inventory list -- every bed, lamp, lotion, chair, washer/dryer, file cabinet, etc. Try to get this to "equal" $65K, or as close as possible, without sounding ridiculous.

By the way -- the bank doesn't necessarily know the "market value" of equipment either. So don't be afraid to use the purchase price of the equipment as YOUR 'estimated value" rather than what it would be on the used market.

Final option besides the above -- have them get the bank loan for the equip value and then cash/home equity/other for the difference. Can't be too much if the total purchase price is $65K.

Good luck!
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Old 06-09-2006, 03:37 PM   #9 (permalink)
 
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Re: Need help on selling our tanning salon please

First I want to thank everyone who offered their suggestions :)

I don't own the building, it's just the business for sale the new owners of our salon will be able to assume the remaining terms on our 5 yr lease
the payment for rent is $955 a month

The buyers did say they had equity build up in their home.
as far as pricing the salon I figured we spent $44,000 on the beds and spent $20,000 of our own money on salon build out, decor and various things in the salon thats how I arrived at the asking price.

We are not looking to make anything other then what we put into the salon
I did consider helping with the loan but we are looking for money to put down on a home in florida when we move. does anyone have any suggestions as to how much the down payment should be 10% or 20%?The only problem with that is he would be looking at a $13,000 payment to me then payments of $860 a month for 5 yrs do you apply interest seems like alot to shell out with rent on salon utilities and loan payments.

I see the guy having a problem getting a business loan for the salon he does own 3 other business in the area and I think he wants this for his wife.

thanks again for all the input

John & Elaine
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Old 01-24-2008, 01:03 PM   #10 (permalink)
 
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Re: Need help on selling our tanning salon please

well you might want to let the buyers know that they are buying a established business. They are not only getting a buidling with tanning beds they are getting CLIENTS!!! I am sure that you have advertised your business and got new customers. Well They are coming into a business that is ready to go. THAT SHOULD BE WORTH SOMETHING!!!:)
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