{"id":561116,"date":"2020-11-05T03:01:52","date_gmt":"2020-11-05T08:01:52","guid":{"rendered":"https:\/\/vrbbd.wpengine.com\/vrbbmadison\/successfully-navigating-seller-financing\/"},"modified":"2022-01-31T12:41:52","modified_gmt":"2022-01-31T17:41:52","slug":"successfully-navigating-seller-financing","status":"publish","type":"post","link":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/successfully-navigating-seller-financing\/","title":{"rendered":"Successfully Navigating Seller Financing"},"content":{"rendered":"
\"\"<\/p>\n

Only a small percentage of the population is able to go through life without using some form of financing at some point.\u00a0 Most people have little choice but to finance everything from their home and car purchases to their college education.\u00a0 Now, with that stated, most business owners would love to receive an all-cash offer for their business.\u00a0 But the reality of the situation is quite different.\u00a0 The facts are that owner financing is very common, and it is sometimes the only way to put a deal together.<\/span><\/p>\n

Sellers have to be ready and willing to entertain the idea that they may, ultimately, be called upon to handle some aspect of financing if they want to sell their business.\u00a0 It surprises many to learn that if a seller is not willing to finance the sale, then buyers begin to worry and may even see this as something of a \u201cred flag.\u201d\u00a0 The reason for this is that many buyers feel that if a business is a solid investment, then the business will be profitable and repaying the seller should be no problem.\u00a0<\/span><\/p>\n

Buyers may worry that if a seller isn\u2019t willing to help with financing there could be a \u201chidden\u201d problem with the business.\u00a0 It might occur to them that sellers are \u201cjumping from a sinking ship.\u201d\u00a0 It is important that sellers keep this important aspect of buyer psychology in mind when addressing whether or not they are willing to finance.<\/span><\/p>\n

Buyer psychology plays a major role in another aspect of seller financing and that comes in the form of collateral.\u00a0 Sellers may want to have some form of outside collateral to secure the loan on their business.\u00a0 While this may seem perfectly understandable to the seller, buyers can have something of a nervous response to this issue as well.\u00a0 As much as buyers worry that a seller\u2019s refusal to provide financing is a red flag, the same holds true for sellers who seek collateral.\u00a0 Once again, the concern is that if the business was healthy and thriving there should be no need for collateral.\u00a0 The buyer is left wondering, \u201cWhat is going on here?\u00a0 How worried should I be?\u00a0 Why do they need collateral if this business is so great?\u201d\u00a0<\/span><\/p>\n

Typically, buyers are \u201cmaxed out\u201d when buying a main street business.\u00a0 They are allocating most of their available funds to the down payment on the business.\u00a0 That means they will be unlikely to \u201cpush all their chips in\u201d and gamble everything by also putting up the home, retirement funds or other collateral in the process.\u00a0 Sellers need to see the situation from the buyer\u2019s perspective and remember that a collateral requirement could mean that if the business fails, the buyer could be left with nothing.<\/span><\/p>\n

<\/span>Navigating the complex interaction between buyers and sellers is no easy feat.\u00a0 It requires a careful balancing of several different skills, ranging from understanding finance to psychology.\u00a0 Working with an experienced business broker can help buyers and sellers connect and find workable agreements so deals can get made.<\/span><\/p>\n

Copyright: Business Brokerage Press, Inc.<\/a><\/p>\n

Rido81\/BigStock.com<\/a><\/p>\n

The post Successfully Navigating Seller Financing<\/a> appeared first on Deal Studio – Automate, accelerate and elevate your deal making<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Only a small percentage of the population is able to go through life without using some form of financing at some point.\u00a0 Most people have little choice but to finance everything from their home and car purchases to their college education.\u00a0 Now, with that stated, most business owners would love to receive an all-cash offer […]<\/p>\n","protected":false},"author":2,"featured_media":561118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-561116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-seller-articles"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts\/561116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/comments?post=561116"}],"version-history":[{"count":0,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts\/561116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/media\/561118"}],"wp:attachment":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/media?parent=561116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/categories?post=561116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/tags?post=561116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}