All Cash Deals. This particular method is rare. Of course, this is the best of all worlds, but many times, when all cash is offered to a seller of an online business, the seller likely isn’t getting the full potential value of the assets. For some sellers, depending on their particular situation, this might be acceptable, but for others, some level of additional capital might be requested, like an earn out on sales and/or profits or a seller note. We are experts at helping Internet business sellers negotiate the best deal possible for their particular needs; we will use our experience at getting deals closed to ensure our client, the seller, is happy with the purchase price and the method by which that purchase price will be paid.
Seller Financing. Depending on the seller and the particular online business being sold, Seller Financing might be a very good opportunity. Seller Financing means that a promissory note is developed between the buyer and seller of a business, the purpose of which is to provide the terms and conditions under which a piece or all of the purchase price will be paid. There are a number of different reasons why an interested buyer might request seller financing, but the primary reasons we have seen include minimizing the amount of upfront capital needed to purchase the online business, helping to provide the necessary capital in an SBA-backed transaction, and using seller financing as a tool to protect themselves with respect to the viability of the business being sold. Regarding the latter, if a seller is willing to take a promissory note and underwrite a part of the purchase price, that alone can give a buyer a high level of comfort that the seller has confidence that if the business is placed into the right hands, it will continue to not only be viable (and thus pay the seller note), but also continue in operation for the foreseeable future. Seller financing is extremely common in online business transactions. A typical reason that seller financing at greater than 10 – 15% occur is oftentimes due to the fact that a Seller does not have financial information in order. It is a very typical occurrence for the tax returns not to reflect the true financial situation in the company. We understand this and we analyze each scenario and make recommendations of ways to maximize the potential financing that we can exact from a lender. If you come to us early enough in the process we can help you get your house in order which will enable you to make the most from your company when the time comes.
Bank Lending. Banks and lenders are what make the M&A world go around. They provide the much needed capital to drive the sale of businesses and are a critical element to the purchase and expansion of the online business industry. We have two decades of experience in matching banks and lenders with business deals, which means that we know what paperwork they require, what their needs-list looks like, what the timing of the underwriting process will look like, whether the SBA will be hands on or hands off (if a Preferred Lender), etc. We can provide coaching up front to buyers and sellers so that they are prepared when the lender comes to them with underwriting requests. This sets us apart, by miles, from other business brokers that really don’t have the experience or network of contacts to get a deal financed. While every deal is different and has its challenges to get closed, we ALWAYS get the deal closed.
As a seller of an online business, we highly encourage you to ask tough questions when interviewing brokers to sell your business. Time is valuable, and wasting your time on a broker that lacks the experience, network and drive to close your deal will only leave you soured by the experience and unwilling to try financing in the future. However, financing a business deal is truly not as hard as many think; it just takes the right experience to see it through to fruition. We have that experience.