Financing the Purchase of a Website - The Small Business Administration (SBA) :: Sell Websites Buy Websites

Financing the Purchase of a Website - The Sm all(prenominal) descent electric pig (SBA)Reprinted with permission of VotanWeb.comOne of the downcast Business Administrations uncomplicated objectives is to help pocketable production linees obtain financing. Although the SBA itself does not make direct loans, it has flock up a number of loan programs to assist small businesses. In connection with al just about of these programs, the SBA provides guarantees to the private sector lenders who actually make the loans. With this warrant in place, these lenders willing generally make loans for the purchase of websites that they would not former(a) make.The discussion at a lower place focuses on those programs that are nearly commonly use by buyers in connection with financing the purchase of a website. discussion section 7(a) ProgramThe naval division 7(a) Loan Guaranty Program is one of the SBAs to the highest degree important and astray use lending programs. Loans may be u sed for a extensive variety of business purposes, including the purchase of websites and most other types of assets. Although in most cases, there is no leap on the coat of it of the loan which layabout be requested from the lender, there is a limit on the mensuration of the loan that the SBA will guaranty. Generally the SBA will guaranty up to $1,000,000 and 75% (85% for loans to a lower place $150,000) of the loan. therefrom, a $1,333,333 loan would be the largest amply guaranteed SBA loan under the Section 7(a) program.Eligibility for this type of loan guaranty is underage on a number of factors. The website must be operated for profit, do business in the , and nonplus a reasonable amount of equity invested by the owner. Note that all owners of 20% or more of the website must in person guaranty the loan. The size of the website must also be below certain(a) size limits ceremonious by the SBA. These size limits vary by industry. surplus considerations imply the webs ite s cash in flow, and the owners character, management capability, and equity contribution. Other details include Loan Maturities - precondition is based on the ability to repay, the loan purpose, and the efficacious life of the website. The maximum maturities are (i) the shorter of 25 years or the reusable life for most hard assets and (ii) 7 years for working capital. headliner Repayments - Loan mavin is structured to amortize over the period of the loan. Thus there is no balloon balance owing on the loans matureness date. Interest grade - Interest rates can be each fixed or floating, and are negotiated between the borrower and the lender.Financing the Purchase of a Website - The Small Business Administration (SBA) Sell Websites Buy WebsitesFinancing the Purchase of a Website - The Small Business Administration (SBA)Reprinted with permission of VotanWeb.comOne of the Small Business Administrations primary objectives is to help small businesses obtain financing. Altho ugh the SBA itself does not make direct loans, it has set up a number of loan programs to assist small businesses. In connection with most of these programs, the SBA provides guarantees to the private sector lenders who actually make the loans. With this guaranty in place, these lenders will generally make loans for the purchase of websites that they would not otherwise make.The discussion below focuses on those programs that are most commonly used by buyers in connection with financing the purchase of a website. Section 7(a) ProgramThe Section 7(a) Loan Guaranty Program is one of the SBAs most important and widely used lending programs. Loans may be used for a wide variety of business purposes, including the purchase of websites and most other types of assets. Although in most cases, there is no limit on the size of the loan which can be requested from the lender, there is a limit on the amount of the loan that the SBA will guaranty. Generally the SBA will guaranty up to $1,000,000 and 75% (85% for loans under $150,000) of the loan. Thus, a $1,333,333 loan would be the largest fully guaranteed SBA loan under the Section 7(a) program.Eligibility for this type of loan guaranty is dependent on a number of factors. The website must be operated for profit, do business in the , and have a reasonable amount of equity invested by the owner. Note that all owners of 20% or more of the website must personally guaranty the loan. The size of the website must also be below certain size limits established by the SBA. These size limits vary by industry. Additional considerations include the website s cash flow, and the owners character, management capability, and equity contribution. Other details include Loan Maturities - Term is based on the ability to repay, the loan purpose, and the useful life of the website. The maximum maturities are (i) the shorter of 25 years or the useful life for most hard assets and (ii) 7 years for working capital. Principal Repayments - Loan pr incipal is structured to amortize over the period of the loan. Thus there is no balloon balance owing on the loans maturity date. Interest Rates - Interest rates can be either fixed or floating, and are negotiated between the borrower and the lender.