Business Brokers Orange County – Options for Financing the Purchase of a Business

Business brokers Orange County are pretty common today. They help entrepreneurs satisfy the beautiful dream of business ownership. Even so, due to the lack of funds, some entrepreneurial dreams remain to be just dreams. The role of business brokers is to make business ownership a possibility. One of the ways they help with this is by offering numerous financing options. Here are the four main options you have when purchasing a business.

Cash
Some of the clients who contact business brokers already have the cash needed to buy a business. All they need is direction on the business to purchase. If you have saved up enough money for the purchase of a business, you can simply make a withdrawal. However, if your plan is to withdraw from your 401K, we caution you about the penalties for early withdrawal as well as the tax consequences. With the 401K option, a business broker Orange County will help establish a C-corporation and use the 401K to buy stock in your business. Using this method in commercial business sales helps avoid the tax implications of 401K withdrawal. A business broker can help you use the HELOC (Home Equity Line of Credit) for the business purchase. For this to work you need over 80% home equity.

Bank financing
Here you will be introduced to the conventional loan options which are rare and also to the SBA loan. SBA loans are loans guaranteed by the Small Business Administration. An experienced business broker will connect you with SBA pre-approved lenders. Even with the SBA loan option, you still need to raise a down payment of 10%. Your broker will also educate you on the changes to the SBA loan program.

Seller financing
This is the most common financing option. It is similar to bank loans only that you get the loan from the business seller. You will, however, need to raise at least 50% down payment and also deal with the interest charged by the seller. The down payment and interest rate are negotiable and a business broker will help you get the best deal. Seller financing is recommended in commercial business sales Orange County because the option allows the seller to have continued vested interests in the business. This means chances of the business failing are very small.

Investors
With this last option, private agreements are made between the buyer and investors. Investors can be your friends or family members. Your broker will help set the terms of ownership early to avoid any issues in the future.

Business brokers Orange County

What Client’s Say

We Couldn’t Be Happier

"When we thought about selling we had no idea what our business was worth or how to go about selling. What you were able to do was to cut through the fog so that we understood the valuation issue and had a comfort level with the process. As you know we ended up selling for somewhat more than the original valuation and we got all cash and our CPA loved the way our tax liability was minimized. We couldn’t be happier!"

Over $250,000 More

"Our first contact with you shocked us when you suggested that we wait 18 months before selling because you believed that if we hit our projections that the value would be significantly greater. As it turned out we not only followed your advice but also got slightly over $250,000 more than we originally had hoped for. It is seldom that we have had the opportunity to deal with a firm that doesn’t want both money and a commitment NOW. It was clear and obvious that you had our best interests at heart."

You Got the Valuation We Agreed On

"You did a great job on the sale of our business in really beating the bushes for buyers, including a UK company that was an active suitor. You managed to get the valuation that we had all agreed upon and got it substantially all in cash and got the transaction closed with little to no problems or expensive lawyers involved."

Thank You for Handling Our Business

"Our business was smaller than what your firm normally handles but it was a BIG part of our net worth and savings. Thank you for handling our business and we were very pleased and delighted with the results."

More Than Anticipated

"Our transaction was involved as we had different corporate entities located in different states. Our only regret is that we didn’t retain your services before 2012 when we paid $25,000 to a firm in Texas that did a valuation and market analysis for us before then failing to do anything in the way of trying to sell our business. You got it sold for more than anticipated."

The Sales Process