Whats a fair interest rate on a Business loan for 2 million over 10 years?

Question

This is my brother and I buying the business from our father, who would be takeing payments. We have been running it for years. We do about 4 million in sales/yr. Just trying to make a fair offer.

Answer 1

Being that prime is around 6.25% these days, it's a family business, your father, I would try to be a bit below and offer around 4.75 to 5.25, he makes decent money and you save a point or a bit more. But it's all about how you inter-relate also with him also, is he willing to accept that? Make him an offer and see what happens.

Answer 2

The truth is you need to contact a business banker. Spreads for banks on amounts above 2 million are paper thin for banks, which is generally good for the borrower. Any decent national bank (Wachovia, BOA, Citigroup) is going to have a way to get you the lowest rate using international and domestic bond pricing modules. It sounds complicated, actually it is rather complicated now that I think about it, but if you get a good CPA and an experienced banker that do these deals often, you can actually save tons of money (and headache). These deals take time (3-5 months), but the savings make up for the wait. If you are within our footprint you can contact Wachovia at 813-681-2866 and we'll help you out. I'd stay away from any type of community bank, just because generally they will borrow that kind of money from a larger national bank which creates a middleman cost. Hope this helps.

Answer 3

if you can borrow that much money... buy up a small fortune in houses in the holiday city in florida.... then resell them in one year to make profit and pay off the loan in total...

if you save like 250000.00 to pay the first years payment.. then sell all the houses by the end of the second year, the houses will have doubled in value, meaning a substantial profit, and you wont have to deal with the apr.. or at least ver minimal with an outstanding profit margain with good credit.... ahhhh.. there you go...

now time to just get that loan...