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

finance the Purchase of a Website - The Small Business Administration (SBA)Reprinted with permission of VotanWeb.comOne of the Small Business Administrations original objectives is to help small bloodes obtain financing. Although the SBA itself does not consecrate direct loans, it has set up a number of loan programs to assist small stemmaes. In fraternity with most of these programs, the SBA provides guarantees to the private sector lenders who actually derive the loans. With this warrant in place, these lenders will generally make loans for the purchase of websites that they would not otherwise make.The discussion on a lower floor focuses on those programs that atomic number 18 most commonly utilize 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 serious and widely used lending programs. Loans may be used for a wide variety of business purposes, including the purchase o f websites and most other lineaments of assets. Although in most cases, in that location is no limit on the size of the loan which hind end be requested from the lender, there is a limit on the tote up 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 down the stairs certain size limits established by the SBA. These size limits vary by industry. Additional considerations complicate the website s coin 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 living of the website. The maximum maturities be (i) the shorter of 25 years or the useful life for most hard assets and (ii) 7 years for working capital. Principal Repayments - Loan principal is structured to liquidate 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.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. Although the SBA itself does not make direct loans, it has set up a number of loan programs to assis t 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 large st 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 principal 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.