business finance question

rockstar1 · #1 (**permalink**) 06-19-2010, 01:56 PM

Hello friends i have a question about a small business purchase. A business partner and I r getting ready to purchase an established small business. My partner has immaculate credit and mine is pretty dinged up.Also, the business needs to be transferred to my name due to several instructional licenses that I hold tht my partner does not yet have. So we were intending to get the loan in his name in order to get a better all around loan. I want to make sure that I share in the loan liability. So my questions r;Will the bank allow tht?r we able to transfer the business license into my name only when the loan is being taken out in his name only?Is there a small business loan type that will allow me to be listed on the loan as sharing in the liability but does not incorporate my below average credit into the loan calculations?

rockstar1 · #2 (**permalink**) 06-24-2010, 11:51 PM

plzzz any one reply

NDeluca · #3 (**permalink**) 06-25-2010, 12:45 PM

I am not a lawyer, but experience teaches the bank doesn’t care whose name the business is in once you get the loan only that the loan is repaid. But you should have a separate agreement in writing between you and your partner so you both understand the deal and are comfortable with it. 2) the license has nothing to do with the loan. The licensing authority only cares about the qualifications of the person applying. 3) If your partner and you are co-signers, then both your credit will be looked at, but they will weigh one against the other. If your partner is the only one on the loan, then you MUST have a separate agreement as stated above. Seems you should have that written agreement no matter what in this case to protect you both financialyy and to make sure the transaction doesn’t ruin your friendship.

sapphirecapital · #4 (**permalink**) 06-25-2010, 05:18 PM

the bank will always look at the better credit but will want to have you on file anyway, so yes you will be taken as a cosignatory, between the both of you you need a contract, also look at tax handling, I would incorporate.

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