An earnout is a type of payment agreement which is sometimes used in a business acquisition. An earnout is a buyer’s commitment to pay the seller a certain amount of the money tied to future performance after a sale. It bridges a valuation gap between what the seller wants out of the business and what […]
Statistics indicate that only about one out of 15 buyers looking for a business to purchase actually ever buys one (Business Brokerage Press, August 2009). Therefore, it is standard practice for business owners and brokers to separate the real buyers from the rest. These indicators will help you determine in which buyer type you may […]
It has traditionally been a common practice for the sale of a privately-held small business to include some seller financing as part of the deal structure as a key to getting a deal done. In the U.S., about 60% to 90% of business sales involve seller financing when bank financing is not an option. Seller financing can […]
How much money down do I need to buy a business? This is one of the most frequent questions we get from those who want to buy a business. Not all ask that question, however, but should. Since most people only buy a business once in their lifetime, they do not know how much money […]
While all transactions are as unique as the parties involved, in most small business sale transactions the seller keeps the cash and outstanding receivables. They pay off the bills and any other outstanding payables and deliver the business free and clear of debt to the buyer. In somewhat larger business sale transactions, there are many reasons why buyers consider […]
This is the question I get more than any other and my answer is YES, Absolutely Yes!! My answer may surprise you, and some may even want to argue, but if you have been in the lending or business brokerage industry for more than 6 or 7 years I think you will agree. When I […]
Taking the time to research the financing and tax implications of a sale can provide you with a strong advantage come negotiation time. Before you can understand the importance of negotiating a final small business sale agreement, it pays to brush up on facts about how sales are financed and how proceeds are taxed. Why? […]
You can use funds from qualified retirement accounts such as 401(k), 403(b), pension, profit sharing, and IRA rollovers to start or buy a business with no taxes, no penalties, no loan repayment and no hassle. Will I pay tax or penalties if I use retirement funds to buy a business? Not if you use qualified […]
There is a general misconception in the small-business acquisition marketplace that a person could easily purchase any type of business through the SBA with a low down payment and get a loan for the rest. Most people also believe that SBA loans are a major source of small business financing. But data shows that SBA-guaranteed loans make up […]
You can use funds from qualified retirement accounts such as 401(k), 403(b), pension, profit sharing, and IRA rollovers to start or buy a business with no taxes, no penalties, no loan repayment and no hassle. Will I pay tax or penalties if I use retirement funds to buy a business? Not if you use qualified […]
“I have a medium sized company which I have owned for about 20 years. We specialize in the manufacture and distribution of chemical products and have built a good business. However, my children aren’t involved or interested in the business so I am considering selling it. The problem is that I have no idea how […]