Qualifying to Purchase a Business

Florida Businesses For Sale

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Businesses For Sale

Every Business Sale is Different

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Every business sale is different. There are always contingencies and variables which effect every transaction. However, there are some rules-of-thumb that provide a springboard for negotiations.

  1. Many businesses are offered on a cash only basis. Financing will have to be arranged by the Buyer. More successful businesses frequently demand either all cash or that they be paid over a specific period of time with specificied interest on the unpaid balance.

  2. If the business purchase is financed by the Seller, the Seller usually demands a Buyer who can demonstrate a reasonable chance of successfully running the endeavor and who has at least 1/3rd of the total agreed price as a down payment.

  3. If the current owner is requested to provide financing for the sale of their business (the Seller "carries the paper"), the Seller will expect a reasonable rate-of-return on the portion of the sale financed. This rate is sometimes based on the Prime Interest Rate banks charge their most proven customers.

  4. Many businesses require additional expenditure by the new owner to update equipment, refurbish facilities, or embark on new advertising programs. Licenses may need to be transfered, training programs purchased, etc.

  5. The inventory may have to be purchased separately. Often this amount is determined effective the date of the sale.

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