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When contemplating the sale of a business, an important option to consider is seller financing.  Many potential buyers don’t have the necessary capital or lender resources to pay cash.  Even if they do, they are often reluctant to put such a hefty sum of cash into what, for them, is a new and untried venture. Why the hesitation?  The typical buyer feels that, if the business is really all that it’s “advertised” to be, it should pay for itself.  Buyers

Running a business can be exciting, scary, and sometimes boring. If you’ve lost interest or are ready to move onto something else, a sale might give you the adrenaline jolt that starting a business once offered. The truth is that most owners are not fully prepared to sell, and have highly unrealistic expectations. The Ext Planning Institute’s State of Owner Readiness Survey in 2013 revealed that the majority of owners (76 percent) hoped to transition in the next decade. Nearly

Sellers generally desire all-cash transactions; however, oftentimes partial seller financing is necessary in typical middle market company transactions.  Furthermore, sellers who demand all-cash deals typically receive a lower purchase price than they would have if the deal were structured differently. Although buyers may be able to pay all-cash at closing, they often want to structure a deal where the seller has left some portion of the price on the table, either in the form of a note or an earnout.