Imagine this: two seasoned Amazon FBA entrepreneurs ready to level up their wealth game.

They’ve got the skills the experience and a vision for acquiring an existing business.

But their budget? A modest $50000. They’re itching to make a move but how can they land a business worth significantly more without breaking the bank?

This is where the story gets interesting.

They find a promising opportunity a well-established Amazon FBA business valued at $355000. But their budget isn’t even close.

The traditional funding routes – loans credit lines and personal guarantees – just weren’t cutting it.

Unlocking Opportunities: The Power of Third-Party Lending

Enter the world of third-party lenders specifically tailored to online business acquisitions.

These lenders often backed by venture capital and angel investors have a unique understanding of the online business landscape and are willing to step in where traditional banks sometimes shy away.

In this particular case the duo with their Amazon FBA experience presented a compelling case to a third-party lender.

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They weren’t just chasing a dream; they had the expertise to manage and grow the business making them a solid investment.

The lender impressed by their track record saw the potential and agreed to provide funding.

The Deal: A Recipe for Success

This isn’t your run-of-the-mill business acquisition.

The deal was structured to benefit both the buyers and the seller with the lender acting as a key facilitator.

Here’s a breakdown of the deal’s critical elements:

1. The Business:

Mature and Consistent: The chosen business was nearly three years old demonstrating a proven track record of consistent earnings without any dramatic profit spikes or dips. This provided the lender with solid data to analyze the business’s earning potential.
Simplified Operations: The business was streamlined with a simple supply chain and only required two hours of the seller’s time each week to manage. This low-maintenance aspect made it an attractive investment for the buyers who could easily integrate it into their existing operations.
Strong Brand Foundation: The business sold several variations of a core product each boasting thousands of positive reviews. This established brand loyalty and market traction making it less susceptible to competition. The products were also trademarked further strengthening the business’s position in the marketplace.

2. The Funding:

Bridging the Gap: The buyers put down a significant initial payment within their $50000 budget and the third-party lender covered the remaining purchase price.
Revenue-Based Repayment: The lender received a set percentage of the business’s revenue until a specific payment cap was reached. This innovative approach aligns the lender’s success with the business’s growth creating a win-win scenario.
Phased Payment Cap: The repayment cap started low and gradually increased each year until a maximum cap was reached. This structure provides flexibility for the business while ensuring a steady stream of revenue to the lender.
Performance-Based Safety Net: The deal included a provision that prevented the business’s revenue from consistently dropping below a set percentage for a predetermined number of months. This safeguard protected the lender’s investment while offering a safety net for the buyers if unexpected challenges arose.

3. The Legal Framework:

Asset Purchase Agreement (APA): The buyers were required to complete an APA a legal document outlining the terms of the purchase and transferring ownership of the business assets to them.
LLC Formation: The buyers established an LLC for the acquired business serving as collateral for the loan. This legal structure provided the lender with a clear legal avenue to claim the business if its performance faltered after the acquisition.
Letter of Intent (LOI): The buyers submitted a seven-day LOI to facilitate the LLC formation process and expedite paperwork with the lender.

The Efficiency of the Deal: Speed and Security

One of the standout features of this deal was its lightning-fast completion.

The buyers closed the deal within 12 days a testament to the efficient operating system of the third-party lender.

This swiftness stems from the lender’s streamlined process which includes:

Pre-Qualified Buyer Pool: The lender has a roster of qualified buyers vetted for their experience and financial capacity ready to jump into acquisitions with the right funding.
Streamlined Documentation: The lender’s procedures minimize bureaucratic hurdles allowing for a smoother and faster closing process.
Transparent Communication: Clear communication between the lender buyers and sellers ensures a smooth transition and reduces the risk of delays.

The Benefits for Buyers and Sellers:

Increased Acquisition Opportunities for Buyers: Third-party lenders unlock doors for buyers who might otherwise be limited by their budget. This allows them to pursue larger more lucrative business acquisitions accelerating their wealth-building journey.
Expanded Market Reach for Sellers: Sellers benefit from a wider pool of potential buyers boosting their chances of finding a good fit for their business.
More Favorable Deals for Sellers: The presence of third-party lenders can lead to more competitive offers from buyers potentially resulting in higher purchase prices for sellers.

The Impact on the Buyers’ Wealth:

The buyers thanks to the third-party lender’s support acquired a business significantly larger than their initial budget allowed.

This acquisition generated a substantial increase in their cash flow propelling their wealth-building goals.

Looking Beyond the Numbers:

This success story goes beyond just the financial figures.

It showcases the power of creative financing solutions and the importance of finding the right partners.

Lessons Learned:

Don’t Let Budget Be a Barrier: There are funding options available that can help you overcome financial limitations and unlock opportunities you might not have considered.
Partnerships Drive Success: Building relationships with third-party lenders investors and experienced advisors can open doors to new opportunities and help you achieve your financial goals.
Embrace Innovation: The online business landscape is constantly evolving so it’s vital to stay informed about new technologies and financing models to maintain a competitive edge.

The Bottom Line:

The acquisition of this $355000 business for a mere $50000 exemplifies the power of third-party lending and its potential to bridge the gap between ambitious entrepreneurs and lucrative opportunities.

It’s a story of innovative financing strategic partnerships and the unwavering pursuit of wealth-building goals.

How Two Buyers Bought an Online Business with Funding in Just 12 Days

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