Category: Financing The Purchase

How wonderful it would be if the banks welcomed business buyers with open arms and an open vault. Sure, all those feel good TV ads from the banking industry like to convey a story of how customer friendly they are…

There is simply no getting around the fact that anyone looking to sell their business will have a greater chance for success if they are able to finance part of the transaction. Further, the vast majority of business sales include…

Everyone is consumed with the current economy and it is clearly impacting the sector of buying a business. Today, I want to talk about the impact of financing a business purchase. Whenever I touch upon this subject and specifically seller…

I received an email this week from someone who is in the throes of a negotiation for a small food service business. He came across the Diomo website (www.diomo.com ) while searching business listings and sent me a question (I…

Question: How do I get my business SBA approved? It seems like doing so would help to move the sale of my business faster. Thank you. Answer: This is a great question and you should be commended for being proactive…

Question: I put an LOI on a $1M ecommerce business, and offered 30% down, with a 6% 10-year note. The broker came back and said the terms were way too low, that seller notes should be prime plus 2-3%, like…

Question: I was wondering if in one of your newsletters you can address more detail on seller financing. More specifically, what typically happens if the new owner is late on payments or stops payments? Most sellers would not like to…

Question: I am interested in buying a business that is for sale for $2 million, with annual earnings of $500k. I am planning to use $500k in home equity for the purchase, but the seller is not willing to offer…

Question: What options are available for financing "goodwill", other than seller notes? How do you finance the business' non-tangible assets? Answer: In many cases of small business acquisitions Goodwill does represent the greatest asset value. Traditional lenders will almost always…

Question: I have found what I believe to be a wonderful business but there's one problem: I really do not have the necessary money for the down payment. The asking price is $650,000 and the seller will finance $425,000 to…