Tips for Business Buyers: Selling Yourself - Seller Financing

Courtesy of Business Brokerage Press
Remember that when a seller offers seller financing, he or she is taking a risk. If you are the buyer, the seller is taking a risk on you, that you will be able to run the business successfully. Therefore, other than a seller needing the cash from the sale of the business, the biggest obstacle to seller financing is the seller's concern regarding whether a new owner will be able to pay off the loan from the profits of the business. While the seller already has the best idea about the potential profits of the business, there are some additional things a seller may want to learn about a potential buyer.

You may want to consider what would best demonstrate that you are a "good" risk and have the documentation ready to sell yourself.

• Do you own your own house? If so, how long have you lived in it?
• What is your work history? What experience will help you as a business owner?
• A seller may ask to see a copy of your credit report.
• Be prepared with a list of personal references.

These are just a few ideas that will allow you to "sell yourself" to a business owner so they may feel better about offering seller financing.

Be sure to check us out every Wednesday for more useful buyer articles...

Seller Financing -- How a Broker Can Help

Another important factor relating to the asking price is the amount of cash involved in the sale. There is an old saying that the higher the full-price, the lower the down payment - and vice-versa. The sale of almost any business involves some seller financing. The smaller the down payment, the higher likelihood of a quick sale. No seller wants to take back his or her business because the buyer wasn't successful. On the other hand, a buyer wants to make sure that the business will not only pay for itself, but also provides sufficient income for his or her family's needs.

What it all boils down to is that the seller wants the buyer to be successful and the buyer wants to buy a successful business. With the amount of capital required in today's market to buy a business, sellers should feel optimistic that they are dealing with successful buyers.

Read on to find out more about four important ways a Broker can help in this process...

• A Valuable Service
• Maintaining Confidentiality
• The Future of the Business
• What Buyers Think

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