3 Options in Financing a Small Business Acquisition
In commercial business sales Azusa, you may feel like you can pay the entire purchase price upfront. However, in our experience at So-Cal Business Brokers, regardless of the transaction size and the purchase price, it is uncommon for business buyers to pay the full amount at the closing table. There are many ways to finance the purchase that don’t require you to pay the full amount at the closing table. Here are the three options we frequently use.
This is a common practice where the business owner agrees to provide some amount of financing to the buyer. A down payment is required and an interest rate applies. The loan is then paid over an agreed period of time. The details on repayment are provided in a promissory note. Our duty as your representative in commercial business sales Azusa is to help you get the best terms in the promissory note. We will also examine your finances to determine the best duration for you to pay the loan. Needless to say, the longer you take to settle the loan the more interest it will earn.
One of the key reasons why we recommend seller financing is because the option keeps the business seller interested in the business and will be accessible to the buyer. Payment on the loan is dependent on the success of the business. If the business fails, the business owner will not get the loan repaid.
With this second option, the SBA becomes the guarantor of the business loan. Buyers are still required to pay down payment. There are several requirements that you are required to fulfill in order to qualify for this financing option. Our team at So-Cal Business Brokers will review you credit score, career experience, personal finances and all other information and advise you accordingly so that you qualify for the SBA. We will also let you know in advance if you will qualify for this financing option or not.
This is the third option we recommend. The non-traditional lender option is becoming more common in commercial business sales Azusa. With this option, you can get financing from investors, friends and a wide range of other unconventional options. If you want to dive deeper into your financing options, give us a call today. Our team of business brokers in Los Angeles will inform you of all your options.
Our mission at So-Cal Business Brokers is to smooth the process of business acquisition. Schedule a free consultation with us today. We are always happy to hear from you.