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Should I Get Paid in Full When I Sell My Business?
If you have already made the decision to sell your company, there is a good chance you’ve already reached the point where you want to be paid in full if possible.
This is a win-win and best case scenario for a person planning to list their company for sale. Choosing to work with a business broker increases the chances that you can get the type of deal structuring and financial setup that you prefer.
Your business brokerwill walk you through the various facets to consider in expanding or contracting your decisions around whether or not to only work with people who can pay in full versus expanding your network to others who might be interested in some other form of payment plan. Most sellers recognize that getting paid in full at the closing table makes things easier for them. However, there are things you need to do in advance in order to get the selling price paid in full at the time closing.
Recognizing How This Limits Your Opportunities
Very few buyers have the relevant money to pay you in full for the selling price of your business. Even those who do have the money may not want to do so. Most buyers of businesses recognize that by borrowing a portion of the purchase price, they’ll be able to increase the return they get on their investment. To get money from a lender, however, a buyer needs to meet certain credit requirements.
Lenders also look at other issues, such as add backs like discretionary benefits taken out of the business, onetime expenses that the buyer won’t have or the interest on loans that are being paid off. The lender will then analyze information from tax returns rather than internal statements or claims about what the business makes. It’s important to keep this in mind if you are thinking about working with a buyer who will be financing the sale.
It might be better for you, in the long run, to receive payments from an intended buyer over the course of time. This ensures that you will be able to partner with the person who is the best possible fit for buying your company.
Our business brokers know that it can be nerve racking to list your company for sale. We know that there are many different things you will want to keep in mind and that there are many different situations in which a deal can otherwise fall apart.
Taking this pressure off of you and passing it on to our experienced and dedicated team gives you the best possible chance of selling your company to a qualified and strategic buyer. This is true even if you intend to only receive cash for the sale of the company. The support of our business brokers can make this process much easier for you.