This is an excerptfrom a Blog Posting By Domenic Rinaldi. Domenic will be presenting “Buying a Businesss” Workshop at score on July 30th. Information about the workshop is at http://bit.ly/BuyBusiness
…… The good news is that business acquisitions are possible without the government and banks. In fact, there was a time when banks played a minor role, if any, in small business acquisition lending. So, we now see the market retraining itself on the practice of SELLER FINANCING. In essence, the seller fulfills the role the banks have played, and in the process, gains back control of their goals. For obvious reasons, this form of financing is met with trepidation by sellers. However, with the proper guidance from seasoned advisors, these types of transactions can be more lucrative and provide better security for both sellers and buyers.
50% – Buyer Down Payment
25% – Seller Note
25% – Bank Note
This business had physical (hard) assets on the balance sheet that exceeded the amount being requested in bank financing. The sellers had a long-standing banking relationship and offered to introduce the buyer to their banker, who was very bullish on this deal. The bank loan was difficult to get…..
This type of financing requires tons of creative thinking, experienced advisors and motivated buyers and sellers.