business loan

How to get a business loan?

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Launching into a commercial activity requires knowledge of certain useful principles such as taking over a business. Taking over a business is profitable, because this process in addition to giving you the right to operate the premises taken over, also makes you heir to the clientele, one of the assets of the company, and the insurance of a minimum turnover, in addition to the trade name and equipment of your predecessor.

How is a goodwill made up?

Goodwill is made up of various tangible and intangible elements that create a unit of economic value. Due to the commercial nature of tangible and intangible elements, goodwill can be perceived as incorporeal movable property, that is to say, rights relating to movable things, such as patents, debts, customers, etc.

Intangible elements

Bringing together all the elements that are impossible to touch and quantify materially, the intangible elements are essential to the smooth running of the company that one intends to take over. They consist of:

The clientele is the first main element of a goodwill, the clientele designates all the current consumers of the service or the goods covered by the fund;

The goodwill, which represents the potential and occasional or passing customers that the fund is likely to bring to the operator due to its location,

The right to the lease is linked to the land, and not to the operator. The right to lease includes the right to renewal, the purpose of which is to protect the buyer by giving him the enjoyment of the premises he

How to finance a business?

Hotel takeoverThe question we ask ourselves when we want to take over or buy out a business is how to finance your business. The sale price of the goodwill increases its market value, which raises the so-called transfer rights and the amount of financing to be found. It is fashionable to take in its own resources in order to finance a business. This requires a personal contribution to facilitate access to credit, but also to call on external entities to support the effort.

However, some organizations make exceptions to the personal contribution condition and are ready to grant credits ranging from 40,000 to 400,000 for a maximum period of 5 years. This is OSEO, now BPI, a public company that supports innovation and the growth of small and medium-sized businesses. It also grants the PCE business start-up loan (loan without guarantee or personal guarantee) which ranges from 2,000 to 7,000 euros with a maximum duration of 5 years.

OSEO has also set up the transmission development contract which makes it possible to finance the purchase of goodwill and acquisition costs. This contract is carried out with a contract that can only represent 40% of the loans put in place.

What are the pros and cons of a business loan?

Taking over a business offers several advantages to the buyer. In addition to inheriting all the assets of the company, the acquirer also keeps the turnover of the previous management and also the commercial name of the company.

But taking over a business is dependent on many disadvantages. When taking over a business, determining what is due to the buyer and what remains for the company, in particular on payments received from customers or even the payment of suppliers on current operations, often proves difficult. In addition, the signing of an asset guarantee act between the transferor and the purchaser is inevitable in order to protect their situation at the time of the transfer of the business. The sale price of a goodwill increases tenfold because of the non-sale of the assets of the company, which conditions a substantial personal contribution, at the risk of requesting a higher loan, this without guarantee to obtain the loan in question.

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