Finance to buy an online business

**Clinton** · May 9th, 2012, 6:04 AM

SusanH, I forgot to mention, I wrote this article on raising money for an online business that might be of interest to you.

**Jacob** · May 14th, 2012, 12:57 PM

Getting a loan to purchase an online venture is much the same process as an offline one. At least it is in the U.S.

The normal tax reports for the company you are buying as well as yours. Running the credit report, going through your business plan etc..

Main issue most people run into is securing the loan. If you want a lower interest rate you will have to put down something to secure the loan such as a house. They will also always want your personal name on the loan as well in case of the companies default you will be liable for the debt.

CUTTING THROUGH THE BS

A much simpler way then getting an unsecured loan or secured loan is just to get a line of credit. With and LOC you can spend the money on whatever you want with out having to provide proof of earnings and the like. I have one LOC that is under 7%. Not a bad rate for a business to have and I can use the money to purchase just about any site I want with out having to spend my own money and can move fast when a deal is to be made. It may take you several years to get an LOC with let's say 100K, however smaller amounts like 10K-20K are rather easy to obtain.

Regards,

Jacob

**Clinton** · May 17th, 2012, 6:01 AM

Thanks, Jacob. Yes, most profitable businesses can get a line of credit (also called a bank line or a revolving credit arrangement). This "overdraft" facility is one where you can borrow and pay back at will within the limit agreed and where you get charged interest only for the outstanding balance. However, I don't know the arrangement in the US but in the UK you can typically expect to pay several hundred pounds in "arrangement fees" every year. So be prepared to shell out a chunk of money for the facility which won't be returned to you at the end of the year if you never use your overdraft.

**ian** · May 17th, 2012, 5:37 PM

I took out a personal loan for a "car" at 7% interest over 3 years to buy my first site. The income is about 4x the loan repayment amount now so all being well it should be paid off within a year (although I will probably have an early repayment charge).

**crabfoot** · May 17th, 2012, 7:33 PM

Originally Posted by ian

I took out a personal loan for a "car" at 7% interest over 3 years to buy my first site.

Stupid boy. "car" requires deposit payment with many lenders, 30% of purchase price. New Kitchen or bathroom comes without the additional deceit. If you need money, go for the home improvement angle when applying for a loan.