A business note is a promissory
note or a contract that is secured by a business and its assets.
How are
business notes created?
Business notes are created when a
business owner sells a business using seller financing.
Who Can
Benefit from the Sale of Business Notes?
About 79% of all
business sales involve seller financing. The seller will accept a cash down
payment for part of the sale and a promissory note for the rest. Often the
seller of the business may want to invest in other opportunities or
investments. The seller may wish to achieve liquidity, pay off debts,
medical bills, buy property, consider retirement and the list goes on and
on. There are many reasons why the seller would rather receive all cash now
instead of holding a note they may have never wanted in the first place and
just move on with their life.
Individuals who have sold a business using owner financing produce a
business note. A typical
business note is similar
to Real Estatenote. The
main difference between the two is that a
business note is secured by a business and it's assets, rather than
by Real Estate.
It is commonly more difficult to get a bank loan for a purchase of a
small business than it is to get a loan for a home. Businesses historically
have a high failure rate, and many businesses do not own enough collateral
to secure a bank loan. Typically, business sellers accept a cash down
payment for part of the sale and a Promissory Note for the balance.
Advantages of
selling a business with seller financing
More potential buyers who want to
buy your business.
With more potential buyers looking, the
business will sell faster.
By agreeing to carry the loan for the
buyer you can get a higher price.
No bank qualifying necessary for the
buyer.
No points or fees associated with the
loan to the buyer.
Easier for buyer to qualify.
Investors often
purchase notes on the following types of businesses:
Restaurants
Bars
Dry Cleaners
Convenience Stores
Beauty Salons &
Day Spas
Auto Repair Shops
Florists
Gas Stations
Medical Practices
Manufacturers
Storage Facilities
Many, many more
Typical criteria necessary for selling a Business Note
If you have already sold your
business using seller financing, you may be able to sell the note if it
meets the following criteria.
Buyer must have good credit.
First position liens only
.
No dollar maximums - minimum typically $20,000.
Down payment of 30% or more.
At least 6 month seasoning with timely payments.
2
years of buyer's personal and corporate tax returns and year end P&L
statements for business.
No private or government liens or any unpaid debts.
If you recently sold a
business and are holding a note, moreover you would like to cash out
for a lump sum, please click
Get Quotelink and fill in the requested information.
One of our representatives will get
back to you as soon as possible.
We are dedicated to helping you get the best possible price
for your note. To find out how much
cash you could receive, please contact us right away! We look forward to helping you free up your cash!
Please click
Get Quoteto get your note appraised or call (520) 423-0400.
