Creating Cash in a Cashless Environment

Getting the Value OUT of Your Business during a Liquidity Crisis

It is of no surprise that based on the prevailing economic conditions that in order to create liquidity through the sale of business is a difficult undertaking today. Some of the more prevalent challenges: The buyers’ perception of risk is greater causing valuations to decrease which may result in the seller’s debt exceeding the value of the business; insufficient business value to retire on or pursue another business venture; getting a deal through the bank’s underwriting process…just to name a few of the current challenges.

The good news is that we are selling businesses. It isn’t all “doom and gloom”. When people are displaced from their jobs, entrepreneurs are born. When there are entrepreneurs born, especially with severance checks, new business starts and acquisitions increase.

To create liquidity you have to make your business compete with a buyer’s alternative investments (real estate, stock market, etc…). The primary “attention getters” are: 1) Consider discounting the sale price for cash; 2) Consider financing a portion of the sale price through a promissory note from the buyer with the same security a bank demands; 3) Elongate the transition of ownership demonstrating your willingness to stay and help to ensure a seamless transition (risk reducer). Flexibility is most important.


Edwin Mysogland, AVA, CMEA, SBA
Managing Partner

Have a topic you would like us to blog about? Let us know! Contact: lspringer@sunbeltindiana.com