Buying a restaurant? Try seeking restaurants for sale with owner financing like the ones shown on this page. We Sell Restaurants works with several owners who are willing to be the "banker" in a deal for a new buyer. This is helpful when you have strong experience but weak credit or simply don't have a lot of cash on hand.
While there are multiple ways to obtain restaurant financing such as SBA guaranteed loans through traditional lenders or another financing, perhaps none is more beneficial to a buyer than owner financing. Owner (or seller) financing occurs when a restaurant or bar owner offers to carry a promissory note and to personally finance part of the purchase.
Rather than pay everything up front, in the case of owner financing, the seller allows for a large chunk of the payment (usually 25 to 50 percent) to be paid in installments over time. Because the seller is performing the function of a traditional lender, they will still require guarantees and a purchase note from the buyer.
Here are the main benefits of a restaurant for sale with owner financing:
1) The owner has "skin in the game" and will be motivated to help you succeed
2) The cost associated with owner financing is minimal versus bank lending which can be costly in terms of upfront fees
3) Seller financing terms can be negotiated easily between a restaurant buyer and seller versus standard terms set by banks
When it comes to buying a restaurant for sale, owner financing is usually advantageous for both sellers and buyers because it eliminates the costs of a bank intermediary. Although owner financing requires that the seller take on the default risk of the buyer, owners are often more willing to negotiate as owner financing can provide extra income to the seller in the form of interest and can move a property more quickly in a buyer’s market.
The restaurants for sale with owner financing offered here demonstrate the number of sellers willing to provide credit to borrowers with good experience that may not qualify with traditional lenders or have other reasons for seeking owner financing.
For many, the dream of buying a restaurant is limited only by the size of their savings or their ability to borrow through an SBA lending program.
If you are buying a restaurant with SBA lending, make sure you are ready to go with this checklist of items the bank will need.