News & Events
Financing the Business Sale -- Some Questions to Answer!
ENLIGN DEAL TEAM | 06/27/2012
Structuring the purchase of a business is an issue that should be faced early in the selling decision. Ultimately, the final structure of the sale will be determined by actual negotiations between buyer and seller, but the seller must still answer the following questions:
- What is the lowest amount of cash acceptable from the sale?
- Has consideration been given to paying off all unsecured creditors and a portion of the closing costs? (Both are, in most cases, the seller's responsibility.)
- Is there any long-term or secured debt that can be assumed by the buyer? (This may make more cash available to the seller.)
- What is an acceptable interest rate for the seller-financed sale?
- Will the business be able to service the debt and still provide a return acceptable to a buyer in relation to the down payment required? (This is a particularly important question for the seller to address.)
- What are the tax consequences of the sale?