Legal Question in Tax Law in California

Re: Selling a business and taking a personal note

Thank you for your inquiry.

Because Schedule C is the part of a tax return that shows sole proprietor business income and expenses, I assume you meant to say that the net income is low on Schedule C, not the taxes.

No attorney can guarantee that you will, or will not, get a loan for the size you seek. That is entirely up to the bank. Banks, however, have criteria that are well known, such as income, assets, and credit scores, and that they use to analyze their risk.

One good first step that I've done for clients is to write a detailed, well organized business plan. A business plan shows the bank how you intend to get to the level of income they need to justify the loan, even if you don't have the current income, you can show specific steps in a written, nicely presented business plan.

I hope this helps, and if you have other questions, need more information, or feel that you need representation, please feel free to email me directly at [email protected]. I'm happy to help in any way that I can.

Re: Selling a business and taking a personal note

While a business plan may help with a bank, and while you might benefit from further consultation, let me see if I can tackle what I think you are asking.

If the seller is so sure the business will be succesful, they should be willing to be involved. As you suceed they get paid. In fact you can offer them more money if they are willing to be paid from profits.

On the other hand, the banks refusal should tell you something, maybe it is not worth 200k.

My .02 worth.

JOEL SELIK

ATTORNEY/BROKER/TAX REP

www.SelikLaw.com

Re: Selling a business and taking a personal note

This is the kind of inquiry which does not lend itself to a short answer to a person who otherwise might not be able to secure legal services. There are many issues to be considered in the purchase of a business, and you need to retain competent, experienced counsel in your area and pay for proper legal representation. Make sure you find someone with a respected firm that has handled the purchase and sale of many businesses, not some one man band who engages in "general practice." This is too important to you to do it on the cheap, or worse yet, to represent yourself. Remember, a man who represents himself has a fool for a lawyer. (And just as important for any new venture as a good business/tax lawyer is a good accountant!)