Brookharbor Lenders in Charleston, West Virginia passes term-loan requests from Kanawha County businesses to funding partners. This page covers buying an existing business, comparisons with an advance and a revolver, short- versus long-term loans and the records a partner may want.
At a glance
- Insurance agencies
Insurance agencies and brokerages, Kanawha County, WV: 83 employer establishments (CBP 2023)
- Dental offices
Offices of dentists, Kanawha County, WV: 69 employer establishments (CBP 2023)
- Restaurants
Restaurants and other eating places, Kanawha County, WV: 347 employer establishments (CBP 2023)
Term Loans to Buy an Existing Charleston, WV Practice, Agency or Restaurant
Buying an existing business means paying for its equipment, its lease, its customers or patients and its name. In Kanawha County, WV the purchases that come up in professional fields include a dental office from a retiring dentist, an insurance agency's book of renewals and a share of a law or medical practice. County Business Patterns counted 69 dentist offices, 83 insurance agencies and brokerages and 160 legal services employers in 2023.
A partner reviewing a purchase looks at the seller's financial history, the price and how it was set, what transfers with the sale, and the buyer's experience in the field. Seller financing for part of the price, where the seller is paid over time, can change how much a buyer needs to borrow.
The dental office page, the insurance agency page and the law firm page each cover purchases in their own field.
Term Loan vs. MCA for a Kanawha County, WV Restaurant Replacing Its Line
A restaurant that has relied on a line of credit, and finds it reduced or not renewed, may be offered a merchant cash advance as a replacement. The two work very differently. A term loan has a stated rate and a fixed payment schedule; an advance buys a share of future card sales for a fixed sum and collects it daily or weekly as sales are processed.
An advance is not a loan, and its cost is usually stated as a factor rate rather than an interest rate. Convert both to the total dollars paid before comparing. The merchant cash advance page explains how an advance is collected, and the restaurant page lists what partners commonly review for kitchens.
Term Loan vs. Revolver for a Law Office Adding an Associate
A law office adding an associate faces two kinds of cost: a one-time set of expenses (furniture, equipment, recruiting) and a monthly cost (salary until the associate's work bills and collects). A term loan suits the first; a revolving line suits the second.
Some firms finance both with a single term loan for simplicity, accepting that they pay interest on money they do not need at first. Others take a smaller term loan and a line of credit. Compare the total cost under the firm's real billing pattern.
What Is a Short-Term Loan and a Long-Term Loan for a Charleston, WV Remodel?
There is no single legal definition, but in general use a short-term loan runs up to about a year or two and a long-term loan runs several years or more. The useful question is how long the remodel will pay for itself.
A dining-room remodel that lasts a decade is a poor fit for a loan repaid in nine months, because the payments will be high while the benefit is spread over years. A short loan makes more sense for a cost that comes back quickly, such as stock for a single large order. Let the life of the remodel set the length of the loan.
An Invented Partner Buy-In Schedule Worked Month by Month
Illustration only, invented figures: an associate in a Charleston, WV law office agrees to buy a partnership share for $240,000. The buy-in is financed over seven years at an invented annual rate of 9.5%.
In this invented case the monthly payment is about $3,922.56. The 84 payments total about $329,495, so the financing costs about $89,495 over the seven years (our arithmetic). The new partner would set that payment against the expected share of the firm's profit before signing.
The amortization calculator shows how much of each payment goes to principal for any amount and term.
Purchase Agreements, Valuations and Returns a Term-Loan Partner May Request
- The purchase or buy-in agreement, or a letter of intent with the price and terms.
- A valuation or the method used to set the price, if one exists.
- Three years of the business's tax returns and a year-to-date profit and loss statement.
- The buyer's personal financial statement and a résumé showing experience in the field.
- For a remodel: the contractor's bid, the lease and the landlord's consent.
- Current debts, each with its monthly payment.
Not every partner asks for all of these, and some ask for more. Each is pulled together only once a partner asks for it.
Term loans appear in four articles: a classroom priced two ways, a one-third dental buy-in, a studio flooring bid and a second-location build-out.
By Brookharbor Lenders · Updated