The epidemic of corporate downsizing in the US has made owning a business a more attractive proposition than ever before. As increasing numbers of prospective buyers embark on the process of becoming independent business owners, many of them voice a common concern: how do I finance the acquisition?
Prospective buyers are aware that the credit crunch prevents the traditional lending...Read More
The first job facing many prospective business owners is rounding up the cash necessary to make the purchase. They may find that banks have made borrowing difficult (or all but impossible), and that even SBA loans have requirements too stringent to meet. One viable option is obtaining financing from the seller; another is to seek help from family and friends.
Borrowing money from family...Read More
Government financing and venture capital financing account for less than one percent of all new business financing. Sixty-seven percent of all small to mid-sized businesses are financed by personal savings or friends; thirty-three percent are financed by lending institutions. The facts about venture capital financing are especially cold and hard…
Venture capital is limited to...Read More
Sellers generally desire all-cash transactions; however, oftentimes partial seller financing is necessary in typical middle market company transactions. Furthermore, sellers who demand all-cash deals typically receive a lower purchase price than they would have if the deal were structured differently.
Although buyers may be able to pay all-cash at closing, they often want to structure a deal...Read More
Three years of profit and loss statements
Federal taxes for the same three years
Current list of fixtures and equipment
The lease and related documents
Franchise agreement (if applicable)
List of encumbrances, loans, equipment leases, etc.
Approximate amount of inventory on hand
Names of outside advisors with contact information
Marketing materials, catalogs, promotional pieces, etc....Read More