Hello! Im new to this forum and am looking at buying an Allstate Agency. My question is about financing it though. Can anybody help point me in the right direction of where they got their financing or know of who does? Will a normal bank give a loan out like this? Special banks, outside lenders or are agents helping to finance some of the sales? With recurring commissions and allstate willing to buy back at 1.5 times, there has to be some type of equity to get a loan off of.
Financing for Agency Purchase???
- Thread starter ray628
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Today is a tough market for any kind of comm'l financing. Banks have pulled their horns in and what would have been almost a certain loan approval is now an auto decline due to suitability and tight money.
Depending on what amount of capital is required for this purchase, you might consider this approach. Find one or more high net worth individuals who have retirement assets in an IRA acct. They can loan the capital from the IRA acct, secured or unsecured. You pay them a periodic rate of interest just as you would a bank or any other lender. There are only certain IRA custodians that might permit these type of loans, as often brokerage firms won't because they want the underlying funds to be invested into products that they sell... it is all about their commission...
What you will find is there are many folks today that are petrified of where to invest and are getting very little return on their funds, (if they have any left after the 40-50% down turn in stocks). You can pay these folks 7-8-9-10% return secured by the book of biz... or even a participating return, like 5-6% interest and a % of profits of the agency; their choice.
One limitation here is upon solicitation... just know your states rules so that if you advertise for funds you could be violating state securities laws. You may wish to check with the SOS first before doing so. Just know that there is a gob of money out there today sitting in MMA's earning 1% or less, and it could be for the asking, and folks really have no idea right now which way to turn.
There may be a need for an interested prospect to rollover some of their IRA funds to an IRA custodian that offers this type of service. Usually they are the ones that do not offer any type of proprietary products, but simply provide the annual record keeping (IRS Form 5500) for qualified monies for tax purposes. I can provide you a short list of these firms, if need be.
Depending on what amount of capital is required for this purchase, you might consider this approach. Find one or more high net worth individuals who have retirement assets in an IRA acct. They can loan the capital from the IRA acct, secured or unsecured. You pay them a periodic rate of interest just as you would a bank or any other lender. There are only certain IRA custodians that might permit these type of loans, as often brokerage firms won't because they want the underlying funds to be invested into products that they sell... it is all about their commission...
What you will find is there are many folks today that are petrified of where to invest and are getting very little return on their funds, (if they have any left after the 40-50% down turn in stocks). You can pay these folks 7-8-9-10% return secured by the book of biz... or even a participating return, like 5-6% interest and a % of profits of the agency; their choice.
One limitation here is upon solicitation... just know your states rules so that if you advertise for funds you could be violating state securities laws. You may wish to check with the SOS first before doing so. Just know that there is a gob of money out there today sitting in MMA's earning 1% or less, and it could be for the asking, and folks really have no idea right now which way to turn.
There may be a need for an interested prospect to rollover some of their IRA funds to an IRA custodian that offers this type of service. Usually they are the ones that do not offer any type of proprietary products, but simply provide the annual record keeping (IRS Form 5500) for qualified monies for tax purposes. I can provide you a short list of these firms, if need be.
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