According to the Small Business Administration, over 200,000 small businesses are created or sold each year. Financing can be difficult, because the collateral is essentially the business assets – whatever they may be – and the acumen/credit worthiness of the new business owner. If a lending institution is not comfortable with the circumstance and declines to provide the financing necessary, the buyer may ask the seller to help finance the purchase. They will agree to all the terms and the buyer will start making payments to the seller, usually over a 5-7-10 year period of time. The parties have just created a BUSINESS NOTE.
Typically, the seller would have preferred to cash out and move on, but now finds himself tied to his old business and depending on his buyer’s business skills to ensure receipt of the monthly payments. Here is a way out. In the small niche of seller financing and note buying exists an even smaller niche – purchasing seller financed, 1st position, business notes secured by the business collateral. If you or anyone you know is interested in selling a business note, I can help provide some options and allow you to make a decision that best fits your needs.