How to Effectively Use Seller Financing When Selling Your Business: A Tale of Smooth Sailing and Tranquil Waters

September 21, 2023

Setting Sail: The Current State of Selling a Business

Ahoy, fellow entrepreneurs! Are you ready to embark on the exhilarating voyage of selling your business? Well, grab your life jackets and get ready to dive into the thrilling world of seller financing. Today, we’re going to navigate through the tumultuous seas of high interest rates, treacherous underwriting, and the seemingly elusive tranquil waters of successful business sales.

The Beacon of Hope: Seller Financing

Is it just me, or does the mere mention of accounting work make you want to jump overboard? I mean, who has time for crunching numbers when there are much better things to do, like…I don’t know…doing what you love? That’s where we come in. At Calculated Moves, we’re your trusty crew, ready to man the helm while you sit back and enjoy the view.

The Treasure Chest: Benefits of Seller Financing

The current state of selling a business is akin to braving a stormy sea. Interest rates are sky-high, making it difficult for buyers to secure financing. Traditional financing methods, such as bank loans or the SBA, are more like a swirling whirlpool than a safe harbor. With SBA loan interest rates running between 10 to 12 percent and additional guarantee fees, it’s no wonder many would-be buyers are left high and dry.

Beware the Kraken: Potential Downsides of Seller Financing

But fear not, my entrepreneurial comrades! There’s a beacon of hope in these choppy waters: seller financing. Yes, you read that right. You, my friend, can become the bank. Imagine this: each month, instead of the buyer paying some faceless financial institution, they pay you. And if the SBA rates are around 10-12%, what if you could offer a more attractive 8% on seller financing? Win-win, right?

Navigating the High Seas: Preparing for Seller Financing

But hold fast, brave explorers! There are potential downsides to consider. What happens if the new owner decides they’d rather walk the plank than continue running the business? What if they default on their payments, close the business, or even worse, run it into the ground? You may find yourself in uncharted waters, having to take legal action or foreclose. And trust me, taking back a business that’s not in the same condition as when you sold it can feel like being marooned on a deserted island.

Charting the Course: Steps Towards Successful Business Sales

However, with careful navigation and strategic planning, seller financing can be a successful journey for many. Plus, there might be a tax benefit. Instead of a giant wave of income hitting all at once, you could recognize a steady stream of income each year, which might improve your tax situation.

Your Trusty Crew: Professional Help for Selling Your Business

So, are you ready to chart your course towards successful business sales? Need help navigating these murky waters? We’re here to assist you in getting your business ready for sale, determining its value, and helping you make informed decisions along the way. Together, we can chart a course to smooth sailing and tranquil waters.

And remember, at Calculated Moves, we believe navigating the ebbs and flows of business should never feel like a solo voyage. So let’s hoist the anchor and set sail towards prosperity!

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Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.