Has anyone bought a network of sites or bought an individual site with financing? I'd like to get a bank loan to buy a large ecommerce site (off bizbuysell or a local business broker), but without owning my own home its impossible despite my credit... So I thought about credit cards, but 11.99% APR? Thats pretty steep, and a large balance can hurt your credit... Then, of course, there's owner financing... I know people that have been lucky and purchased brick and mortar stores with (at least some) owner financing, but has anyone bought a website with owner financing? (Guess I'll get there $250 at a time eventualy.... )
I dont think I would ever take that kind of risk. If you do it though, the best of luck to you. I don't know anyone that has done this.
It will probably require three parties. The seller will want to get paid right away and be VERY aware of how easily the new buyer could mess up the site. The buyer may have great ideas, but ideas are cheap and not easily implimented. However, a third party that has some capital and knows how to rescue sites could cash out the seller (at a heavy discount) and become responsible for ensuring the new buyers performance. The seller gets his cash (at least most of it) and the buyer gets a chance to buy a good site which would otherwise be unaffordable. Whats in it for the investors? At worst the buyer is a success, pays interest, and they profit from the discount. At best the buyer fails and they pick up a repairable site cheap
What is the cost of this business venture? I am assuming that it is fairly high or you wouldn't be posting this question. If it is not extremely high, I think that a credit card would be the best way to go. Otherwise a unsecured or secured bank loan may be the next best way to go. There is definitely considerable risk in this so I think finding a financier could be difficult. Same thing reguarding financing with the owner.
I was looking at $10-$15k, not much. My worries about credit cards is that I'd have to put 100% of the profit into paying off the card(s) for at least a year, assuming the sites perform steadily.... too much risk... oh well, guess I'll pick up some more bartending shifts...
build your own site and sink the money you do have into inventory. ramp up the SEO and content, and by the time you would have raised the 10-15k to purchase the site, you will have one that is truly your own. 2 friends of mine quit their jobs in the .com boom to finance a startup .com with their credit cards. The idea lasted less than 6 months, They are still paying their cards off, 5 years later.
Why not become a 'rate tart' and take the money from the 0% APR credit cards, and move the debt around when the 0% time runs out? We have loads of these in UK, so I'm pretty sure it works in US too. But this is only if everything else fails as business loans are a hell of a lot more flexible. Banks over here normally work on 50/50 basis if they like your business plan and your credit rating, so maybe 50% from cards and 50% from bank.
Blitz, I thought about the 0% thing... but, I'd like to use my existing cards to avoid having new accounts that lower my credit score (eventually I would like to buy a house, so thats a big concern of mine)...
i work for a bank/credit card company and have been trained in various things including new accounts which i learnt quite a bit from basically if you only apply for credit every 8 months it wont have any detrimental effect on your credit, it may knock a fewpoints off but in the 8months youve been paying your account off youve got those points back, its when you start getting 2-3 applications in 6months that you have a problem, also as far as im awaremortgages dont really go off your credit score too much anyway mainly because the debt is secured on the house, you will normally also pay a deposit so if for whatever reason you lost your job they have your deposit and any additional payments and can sell your house so therefore being a rate tart would be ok in your circumstances.
Theoretically it should work out ok though... The average site sells for 100% ROI, which in terms of investment is fantastic, and it is way above the 17% that you would pay for a credit card. The trouble is when you quit your job you suddenly become a big risk to lenders so your credit limits will be pretty low.