As you prepare to sell my business Elijo Hills, it is good to note that seller financing is not something that should be entered into lightly. You have to review all the pros and cons, and the dos and don’ts before going for this option. In this post we will be looking at some of the key things you should do when getting ready to sell your business.
Enlist the help of a business broker
Even after making all the considerations, you will still need to work with a business broker. As you sell my business Elijo Hills, the role of the business broker will be determining if your business is suited to offer seller financing. The broker will also help you establish a contract that has clearly defined terms and conditions. A foolproof contract will be essential when it comes to reducing risks and misunderstandings.
Make it known in the sale ad
If you are certain you want to offer seller financing, you should make that known early. This is because including the point that you are offering seller financing will compel more potential buyers to reach out to you. The more buyers you attract the quicker it will be for you to sell your business. Attracting more buyers also increases chances of closing fast because you will have more competing bids and sellers willing to offer top price for your business. Â
Require a sizeable down payment
To reduce risk and ensure you are only dealing with serious buyers you need to always require a sizeable down payment. This should be at least a third of the total purchase price. Buyers that are able to raise that amount are able to acquire and run your business. Failing to ask for a down payment will leave you exposed because the buyer who takes over your business will have nothing to lose if he or she chooses to abandon the business.Â
Discuss loan security
Last but not least, you have to discuss matters loan security. Loan security ranges from personal guaranty from the buyer and their spouse that if payment is not made according to the terms in the promissory note the seller can foreclose on the business. Security can also be something more specific collateral in the form of a mortgage and security agreement on personal property. It is also okay for loan security to be in the form of stock pledges.
There are is a lot that goes on in seller financing. The key is to involve a business broker in San Diego to guide you through the process.