Your business broker San Elijo Hills may recommend offering seller financing. This is an option where you allow a buyer to pay off a portion of the buying price over a period of time and with interest. But why exactly should you consider offering this? In this post we will be looking at the three main reasons why offering seller financing is the best way to go.

Increases likelihood of selling fast

Brokers have found that businesses that offer seller financing are more likely to sell. This is for the simple fact that when you offer seller financing, you show buyers that you have confidence in your business. The thinking behind this is if your business is failing, offering seller financing will mostly hurt you because the ability of a buyer to pay off the loan and with interest will depend on the profitability of the business.

Offering seller financing demonstrates to buyers that you have confidence in the business you are selling. Buyers also love the option because offering seller financing means you have vested interest in the long term success of the business. All in all, before you offer seller financing it is always wise to consult your business broker San Elijo Hills. Seller financing is not ideal for every business.

Increases likelihood of getting a higher selling price

One of the reasons many businesses fail to sell is because the buyers don’t have the money to pay the price in full. To sell fast, sellers attract more buyers by lowering the selling price. If you believe in your business and want to sell fast and without lowering the price, you should consider offering seller financing. Financing a business for sale will enable you to set a higher selling price. You can offer to finance up to a third or more of the sale so that the buyer pays at their own pace. That way you will not only have incentivized buyers but also managed to sell at a higher profit.

Talk with a business broker in San Diego to discuss the terms for seller financing. You also need to set a price that is slightly higher than the asking price in order to offset the risk of financing.

You earn more profit from interest

Being able to set a price that is higher than the asking price is not the only advantage of offering seller financing. You will be able to collect more profit from the interest that you charge. The option will further help you spread out taxable income from the sale over time. The option also takes less to clear than commercial financing and considering banks require more time to approve a loan, seller financing helps close even faster.

Business Broker San Elijo Hills