Eight Key Steps to Selling Your Business and Cashing In
This year, some 700,000 American businesses will be sold. Most will be small and
mid-sized businesses like yours. If you, too, are thinking of selling, consider these
practical steps for making the process go smoothly. Determine a Realistic Price Range Understand the Tax Consequences Prepare for a Sale Seek Potential Buyers Negotiate Your Deal Sign a Sales Agreement Plan for the Closing File Paperwork With the IRS Now for the GOOD STUFF! Getting the Cash Out of your Business Note, known more specifically as seller
carryback business notes, are created when the buyer of a business can not or will
not pay all cash. Frequently, banks and similar lending institutions are hesitant to
loan money to new business owners who have minimal track records and where
hard assets make up a small percentage of the total purchase price. In the case where a buyer cannot obtain a loan, the seller is left with two choices (1)
hold off until he/she find a buyer who can pay all cash or (2) carry back a note in
order to collect future payments. The first option is often not realistic. In the second
case, the seller is hopefully able to at least extract a large down payment to make
extra sure that the buyer has some "skin in the game". However, even then the seller
is usually in a position that he prefers not to be in - he has no lump sum of money
to either invest in other opportunities or to retire. Unlike a real estate note, where is
there is a hard asset that is fairly easy to appraise; the business note is relatively
risky to hold. So, what is a business seller to do when he didn't want to be in the lending business
to start with and now has a need for immediate cash? What many people don't
realize is that the business note can be sold. The former owner can sell all or part of
the note to get a lump sum of cash. In this way, both the goals of selling the
business and getting the cash out of it are met. In summary, selling a business note is an excellent way for the former owner of a
business to get his cash out of the business. Whether the reason for selling the note
is that the seller would have preferred all cash all along, that he now has large debts
to pay, or that he has the opportunity to pursue other investments, the sale of a
business note is a tool of which you should always be aware. Afra AmirSanjari is the Principal for Peacock Capital. Peacock Capital specializes in
solving the cash flow challenges of Small/Medium Businesses, Government Vendors
and Individuals with innovative financial solutions by providing a network for
securing operating capital. http://www.peacockcapital.com;
info@peacockcapital.com
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