The epidemic of corporate downsizing has made business ownership a more attractive proposition than ever before. As increasing number of prospective parties who are looking to buy a business in Pennsylvania embark on the process of becoming independent business owners, many voice a common concern:
How do I finance the acquisition?
There are several options for financing and structuring a business acquisition. Our seasoned professionals at VR Business Brokers located in Newtown, PA, serving Bucks County have expert knowledge in financing and can guide you to find the best possible financing solution. In many cases, this solution can mean the difference between a successful transaction or a lost opportunity.
It is important to have a financing solution that will serve the capital and cash flow needs of the business for sale in PA, and preserve the lifestyle needs of the buyer while maintaining the integrity of the transaction for the seller.
Seller financing greatly increases the changes that a business will sell. Seller financing commands a higher selling price. Interest on the seller financed portion of the transaction can significantly add to the total proceeds received for the sale. Interest rates on seller notes are higher than money market or CD rank rates. The path offers positive consequences compared to all cash sales (check with your tax professionals).
SBA Financing
SBA Financing offers buyers attractive loan terms and interest rates while eliminating or reducing the need for the seller to carry a note. This means a lower down payment and lower debt service for the buyer, which translates into more net income for the buyer. Both of these factors make SBA financing attractive.
SBA Financing often reduces the amount needed for a seller note. It lowers down payments, which increases the number of prospective buyers.
Buyer’s Retirement Funds (401k or IRA)
IRAs, 401(k) Plans,403(b) Plans, SEPs, SIMPLE Plans, Annuity Plans, Profit Sharing Plans, Defined Benefit Plans,457 Plans (govt. only), Cash Balance Plans, Money Purchase Plans, Rollover Plans ESOPs.
Most are not aware that the funds for purchasing a business with no debt, no penalties and no upfront taxes, are available right in their corporate careers retirement assets!
Valued Representation by your VR intermediary will include exploring these and other types of favorable financing options available to you as a qualified buyer of a business for sale in Pennsylvania. During the buyer qualification process, VR Business Brokers located in Newtown, PA, serving Bucks County will council you and help manage your expectations once an offer is accepted by the seller.
Are you ready to learn more?
Valued Representation by your VR Intermediary will include exploring these and other types of favorable financing options available to you as a qualified buyer.