Why 'Holding Paper' to Complete the Sale of Your Indiana Business is a Good Idea
A potential buyer of a small business for sale by owner in Indiana including wanting to 'buy a job' in order to earn a living, buying community prestige, seeking self-fulfillment, purchasing an attractive real estate leasing opportunity, and eliminating competition. Pin-point a buyer's motivation and the selling process becomes easier by default. Keep in mind that 99% of business buyers never actually end up pulling the trigger so rapport and relationship building dynamics go the furthest.
While most sellers would love to just sell their businesses and wash their hands, things hardly end up being that cut and dry. Unless there's a corporate buyer with deep pockets snapping at your heels, you should plan on taking out a promissory note in order to assist the buyer with the purchase of the small business for sale by owner in Indiana. Whether you are a fan of the idea or not, creating a contingency plan based on 'holding paper' or seller financing should at the very least be considered.
Some Thoughts on Seller Financing
1. Status Quo
2. Capital Shortfall
3. Great Deal of Latitude
When you, the seller, offer the terms, you can get the best price out of the deal. After all, you're not going to give yourself a bad deal if you can help it. You can present fair terms that are beneficial for both yourself and the buyer; you can select the ideal interest rate that pays a fair owner's wage while still leaving room for debt service; and you can choose an optimal payoff period. You get the full purchase price on top of the compound interest. Some buyers will want you to stay on a bit longer during the transition - this is an opportunity to get even better terms.
Locating a buyer for a small business for sale by owner in Indiana becomes much easier when you stop to consider the buyer's perspective. Holding paper or offering seller financing eliminates many deal-killing obstacles including lack of buyer capital, squeamish lending institutions, deal expenses, and general lending thresholds. Maybe it's time to consider this if yo're an Indiana manufacturer for sale or even a gas station for sale in Indiana.
If you are selling a business or looking to buy a business in Indiana, send me an inquiry about your situation and we can talk about what to do next.
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