Archive for the ‘Financing’ Category

Using your Retirement Funds to Purchase a Business

Thursday, March 24th, 2016

Although not obvious to many, even knowledgeable observers, pension, profit sharing, 401(k), 403(b), other retirement plan and rollover IRA money may be used to fund your own franchise, business start-up or business property.  This can be done without distributions, taxes, penalties, or the use of loans. It’s sort of a self-venture-capitalization.  These transactions are within…

Business Purchase Financing: Mezzanine

Wednesday, March 23rd, 2016

Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It could be described as a hybrid of debt and equity financing that is is typically used to finance the expansion of…

Business Purchase Financing: Bank Loans

Wednesday, March 23rd, 2016

Bank Loans are an option that some Potential Buyer can use to finance the purchase of a business.   Banks and other lending agencies provide unsecured loans commensurate with the cash available for servicing the debt. “Unsecured” is a misleading term, because banks and other lenders of this type will aim to secure their loans…

Business Purchase Financing: SBA Backed Loans

Wednesday, March 23rd, 2016

SBA Backed Loans can be an option for financing a business purchase. Thanks to the U.S. Small Business Administration Loan Guarantee Program, favorable financing terms are available to business buyers. Similar to the terms of typical seller financing, SBA loans have long amortization periods (ten years), and up to 70 percent financing (more than usually…

Business Purchase Financing: Venture Capitalists

Wednesday, March 23rd, 2016

If you are looking to finance your business purchase through investors, venture capitalists are an option.  Venture capitalists have become more eager players in the financing of independent businesses. Previously known for going after the high-risk, high-profile brand-new business, they are becoming increasingly interested in established, existing entities. This is not to say that outside…

Business Purchase Financing: Seller Financing

Wednesday, March 23rd, 2016

Seller financing is perhaps one of the simplest–and best–ways to finance the acquisition of a business. This means that the business buyer works  hand-in-hand with the seller. The seller’s willingness to participate will be influenced by his or her own requirements: tax considerations as well as cash needs. In some instances, sellers are virtually forced to…

Business Purchase Financing: Buyer’s Personal Equity

Tuesday, March 8th, 2016

Buying a business is a serious financial decision and it is not uncommon for a potential buyer to not have the purchase price amount of cash on hand. One of the most common hurdles that many Prospective Buyers face is: How do I finance the purchase of an established business?  Prospective Buyers should think very…