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HOUSEFIRE74 · Feb 4, 2009, 07:54 AM

I have any opportunity to buy an already running business with a good profit margin. The money for this purchase will come from an inheritance of stock valued between 2-4k per year for life. The estate is having a hard time getting to probate because of my father's "widow" is contesting the process. As a rightful heir, there is a minimum of stock I will receive in our family's company.
Is there someone I should talk to about getting a bank to pre-approve a business loan on money pending? I really only need a bank to let me, and the owner of the business I want to buy, that when my inheritance is final I will qualify for this loan to buy his business. He is willing to wait as long as I can show that I will qualify

excon · Feb 4, 2009, 08:02 AM

Hello H:

You're not going to get a loan on a maybe.

However, MOST small business's are purchased with financing from the existing owner. If he wants to sell you his business, then he can and HE can wait till your inheritance arrives, if it's going to.

The seller has an incentive to do that. But, a bank HAS no incentive, and will lose BIGTIME if your inheritance DOESN'T come through. There ain't a bank in the world that will do that...

excon

HOUSEFIRE74 · Feb 4, 2009, 08:17 AM

Thanks E,
I only wanted someone to tell me if I receive X amount, then I would Qualify For X loan. Is that possible.
thanks

excon · Feb 4, 2009, 08:39 AM

Originally Posted by HOUSEFIRE74

I only wanted someone to tell me if I receive X amount, then I would Qualify For X loan. Is that possible.

Hello again, H:

Only if your inheritance is a slam dunk. From the way you described it, it's FAR from that.

Plus, I couldn't discern exactly HOW much you'll be getting... Usually the value of an inheritance is described by the principal amount - not the dividends - IF that's what you're describing...

Besides, a company can always STOP paying dividends..

Plus again, you say that as a rightful heir, you'll receive a minimum amount of stock. That MIGHT be so, if the will wasn't being contested, but you say it IS..

Therefore, you might inherit a lot, and then again, you might not.

excon

HOUSEFIRE74 · Feb 4, 2009, 08:45 AM

I have joint ownership/ survivorship rights to half of his stocks, am named as 1/3 benefeciary of the rest. And as I said, By the Florida law and his will I am in line for a minimum of 35% of his estate. And at maximum 50%. Does that matter?

excon · Feb 4, 2009, 08:52 AM

Originally Posted by HOUSEFIRE74

Does that matter?

Hello again, H

Only if it survives the challenge by his widow. I have NO idea WHAT she's challenging... If her claim WON'T effect your inheritance, then you're looking pretty good. But, I can't see her claim NOT effecting you.

Then again, I don't know the details. You tell me, if she wins, how much are you STILL going to get? ANYTHING??

excon

HOUSEFIRE74 · Feb 4, 2009, 09:08 AM

Hi E,
If she wins, she will only be entitled to 30%. The rest is to be split between my brother and me. These stocks are worth approx. 750k per year for life. I miss typed earlier. My part (high end 400k-200K low end). She has just found out about our(my brother and I) survivorship papers we signed with our dad before they married. Since they married he accumulated shares of another 7 stores that we don't dispute she gets 1/3 of those stores stocks. The first 7 stores stock are what in survivorship. Since the will and the survivorship/ joint ownership were singed in Ohio and they have since moved to Florida we have a snag in the tranfer of state laws.
She is at this point contesting a third party as executor(Which in my father will stipulates that this contestation is grounds for exclusion from his will). Which is another Question on how will stipulations are seen by law.

Thank a lot for your help E.

excon · Feb 4, 2009, 09:19 AM

Hello again, H:

I hope you get it. Looks like you will.

But, I STILL don't think a bank is going to lend you money based on that. Maybe the assets of your new business, such as real estate, automobiles, equipment, fixtures, licenses, accounts receivable and others that could be used as collateral for a bank loan. You could certainly run it by your local branch manager.

But, I again, suggest, that if the seller really WANTS this transaction to happen (and ALL sellers these days are DESPERATE), then he'll supply you with a bridge loan the same as a bank would.

excon

HOUSEFIRE74 · Feb 4, 2009, 09:31 AM

Thank for the support E,
Would you know anything about how joint ownership/ survivorship rights to these stocks would hold up to Florida laws. This seems to be an answer I cannot get as of yet.
It was my understanding that these stocks should have transferred upon death, but nobody can tell me why these might be considered as part of the estate because of his residence change to Florida.
And does it seem lengthy that it has been 3 months since my father died and we still don't have and executor.

excon · Feb 4, 2009, 09:37 AM

Originally Posted by HOUSEFIRE74

And does it seem lengthy that it has been 3 months since my father died and we still don't have and executor.

Hello again, H:

I actually DON'T know about probate law.

But, I think it might be time for you and your brother to hire an attorney, assuming your interests and his are the same. You're dealing with a considerable amount of money here (at least to me), and I think you need your interests looked out for.

excon