Financing the Deal

 

In purchasing your business, there are multiple financing options that you can choose from.   Picking the right option may vary depending on the particular situation of the business that you are buying.   Here are options for you to choose from:

• Lump Sum Cash Deal

  • Best case scenario for the Seller

  • Buyers pays in full at closing

  • Depending upon the value of the company, this may be difficult for the buyer to arrange

• Buyer Financing

  • Most popular financing option

  • Requires significant down payment - 20% standard

  • SBA Loans

  • Commercial Loans

• Seller Financing

  • Buyer is paying Seller full sales price and interest.   In this scenario, the Seller is the bank and takes on the liability that the buyers pays.

  • Buyer adheres to schedule of payments over time until the Sellers ownership is fully purchased

• Earn-Out

  • Seller is paid negotiated sales price over a specified period of time

  • Seller is needed during this transition period for guidance. skills, relationships that allows new buyer to be successful

  • Could be based upon the performance of the business meeting sales and/or profit goals.