Established, Profitable Cell Phone Repair Business – Seller Will Finance

Death of the owner prompts the sale of this 11 year old cell phone repair store. The owner's father is managing the sale of the business, and has priced the business substantially less than its valuation of $94,000, to effect a quick sale.

Highlights of Business
• Nicely profitable business
• Could be operated with no employees
• Priced substantially less than its value for a quick sale
• Very well-established – in business since 2012
• Immediate profitability – take over one day, be profitable the next
• Seller would provide financing with 40% - 50% down payment to a qualified buyer
• Beautiful, clean, upscale premises
• Business may qualify for SBA financing which would mean a lower down payment
• Seller will sign a non-compete agreement
• Substantial sales growth possible by adding additional services, resuming advertising, and having an owner-operator

The seller is representing that the Discretionary Earnings of the business for 2022 was $79,444 and can prove it to a buyer and their accountant's satisfaction.

Down Payment: N/A

Total Sales: $130,342

Cash Flow: $79,444

EBIT: N/A

EBITDA: N/A

Accounts Receivable: N/A

Accounts Receivable Included: No

FFE: $16,900

FFE Included: Yes

Inventory: $20,000

Inventory Included: Yes

Year Established: 2012

Days & Hours of Operation: Monday-Friday 10-6; Saturday 10-5

Owner Hours Per Week: 5

Non-Owner Payroll: N/A

Employees: 2

Absentee Owner: Yes

Lease Option: An offer on this business would include a contingency of obtaining a lease acceptable to the buyer in all respects.

Real Estate: N/A

Monthly Rent: $825

Type of Location: Upscale, modern, well-appointed space on one of the busiest streets in Springfield

Square Footage: Approximately 800

Terms and Conditions?:

Financing
SELLER FINANCING: The seller will consider providing financing based on a buyer’s abilities and credit, and would consider seller financing with 40-50% down from the buyer, with the balance to be paid over 3-4 years, at 6-7% interest rate. The buyer would need their own working capital.

SBA FINANCING: This business may qualify for SBA financing, since it has good books and records, and is priced attractively for its Discretionary Earnings. See the Test for Reasonableness of Purchase Price calculations elsewhere in this business review for a typical financing structure.

The seller estimates that $10,000 would be needed for working capital. Buyers should consult their accountant if necessary, to determine if that is an appropriate amount of working capital for this business. Most lenders would be happy to loan that much or more in working capital for this business, as the cash flow from the business would fully support it.
Down payment for the business would be approximately $8,850, assuming an SBA loan, sales price of the business of $75,000, $10,000 borrowed for working capital, and loan expenses added to the SBA loan of $3,500.

The advantages of a business being able to be financed with an SBA-guaranteed loan are:

1) A lower down payment than a seller would require were they providing financing (typically only 10% of the Project Cost is
required by SBA rules);
2) A much longer term than a seller would offer (typically 10 years per SBA rules); and
3) A lower interest rate than a seller would typically offer (currently around 10.0%).

Often a conventional loan is not a possibility in financing the purchase of a business, because the cash flow of most successful businesses is worth more than the value of the business’ assets, so there is insufficient collateral to secure a conventional loan. SBA loans are based on the cash flow of the business and are less dependent on the amount of collateral available.

SPECIAL SBA PROVISIONS EXPECTED TO CONTINUE UNTIL SEPTEMBER 30, 2023

The SBA historically has charged a guaranty fee of approximately 3.5% of the guaranteed portion of the loan, which is 75% of the total loan. The guaranty fee is added to the loan.

Currently, there is no guaranty fee on loans up to $500,000.

On this business, the savings in guaranty fees is approximately $1,973, as long as the current attractive SBA guaranty fee provisions remain in place.

Reason For Sale:

Death of Owner

Training & Support:

The seller will provide 2 weeks of training after closing at no additional cost.

Historical Summary:

The business was started in 2012.

Competition:

The business has normal competition in the area.

Potential Growth:

There are several ways the business could be grown.

Financing/Terms:

Financing
SELLER FINANCING: The seller will consider providing financing based on a buyer’s abilities and credit, and would consider seller financing with 40-50% down from the buyer, with the balance to be paid over 3-4 years, at 6-7% interest rate. The buyer would need their own working capital.

SBA FINANCING: This business may qualify for SBA financing, since it has good books and records, and is priced attractively for its Discretionary Earnings. See the Test for Reasonableness of Purchase Price calculations elsewhere in this business review for a typical financing structure.

The seller estimates that $10,000 would be needed for working capital. Buyers should consult their accountant if necessary, to determine if that is an appropriate amount of working capital for this business. Most lenders would be happy to loan that much or more in working capital for this business, as the cash flow from the business would fully support it.
Down payment for the business would be approximately $8,850, assuming an SBA loan, sales price of the business of $75,000, $10,000 borrowed for working capital, and loan expenses added to the SBA loan of $3,500.

The advantages of a business being able to be financed with an SBA-guaranteed loan are:

1) A lower down payment than a seller would require were they providing financing (typically only 10% of the Project Cost is
required by SBA rules);
2) A much longer term than a seller would offer (typically 10 years per SBA rules); and
3) A lower interest rate than a seller would typically offer (currently around 10.0%).

Often a conventional loan is not a possibility in financing the purchase of a business, because the cash flow of most successful businesses is worth more than the value of the business’ assets, so there is insufficient collateral to secure a conventional loan. SBA loans are based on the cash flow of the business and are less dependent on the amount of collateral available.

SPECIAL SBA PROVISIONS EXPECTED TO CONTINUE UNTIL SEPTEMBER 30, 2023

The SBA historically has charged a guaranty fee of approximately 3.5% of the guaranteed portion of the loan, which is 75% of the total loan. The guaranty fee is added to the loan.

Currently, there is no guaranty fee on loans up to $500,000.

On this business, the savings in guaranty fees is approximately $1,973, as long as the current attractive SBA guaranty fee provisions remain in place.