Why Would a Seller Want to Finance the Deal? Owner Will Carry Seller Financing

Why Would a Seller Want to Finance the Deal? Owner Will Carry Seller Financing | business broker smb

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David C Barnett Small Business and Deal Making SME

Күн бұрын

www.HowToSellMyOwnBusiness.com
www.BusinessBuyerAdvantage.com
Learn more at www.DavidCBarnett.com
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Learn why you might need to be part of the financing solution of a business sale and why this may be an amazingly profitable turn of events.
Check it out in this week’s video: • Why Would a Seller Wan...
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owner will carry seller financing business broker seller note

Пікірлер: 62

@richdamico7524 3 ай бұрын

You could replace the word 'business' with the words 'commercial property,' and the same points would apply. Great video. The deal has to be a win-win for both buyer and seller. If a seller is too greedy or lets emotions get in the way, it could put the buyer in a position to default."

@DavidCBarnett 3 ай бұрын

Great point!

@seanlee2278 3 ай бұрын

I guess great negotiators know how to wear various hats. Thanks for teaching us!

@DavidCBarnett 3 ай бұрын

Thanks Sean.

@drking3000 6 ай бұрын

Super informative, I've seen so many fluffed youtube videos, and you actually give great insight.

@DavidCBarnett 5 ай бұрын

I'm glad you found it useful.

@jamieiannaco601 2 жыл бұрын

Great information David! This is the stuff that you need to know to get deals done.

@DavidCBarnett 2 жыл бұрын

Glad it was helpful Jamie!

@bulletproofalpha4667 Жыл бұрын

This is absolute gold. Thank you so much.

@DavidCBarnett Жыл бұрын

You're very welcome!

@adamholbrook2281 Жыл бұрын

Thank you for this content. I appreciate your perspective. You made a lot of good points.

@DavidCBarnett Жыл бұрын

Glad it was helpful!

@richardtan6799 2 жыл бұрын

Your content is awesome, David! All down to earth info, street smart know how, with no fluff. You clearly know this stuff, and your integrity and honesty is most admirable.

@DavidCBarnett 2 жыл бұрын

I appreciate that! thanks Richard.

@entdesignstudio 8 ай бұрын

Brilliant! Thank you for sharing!

@DavidCBarnett 8 ай бұрын

You're welcome

@calhutson1775 Жыл бұрын

This was a very good video with excellent content. Very nicely done, David. Thank you.

@DavidCBarnett Жыл бұрын

Glad you enjoyed it!

@richardbaxter7343 Жыл бұрын

Brilliant as always David! Stay healthy and wealthy

@DavidCBarnett Жыл бұрын

Thanks Richard.

@haciendadad Жыл бұрын

Great video! Great explanation! Sir, you are a very good teacher!

@DavidCBarnett Жыл бұрын

Thank you kindly!

@gradosa8272 3 жыл бұрын

wow. thanks for the information. your videos have saved me years . I planned to buy a business this summer but after listening to you, its more prudent to wait a little longer and start with a solid footing. thanks again . God bless you with health and wealth.

@DavidCBarnett 3 жыл бұрын

This is my mission. To help people avoid bad deals and go into good deals with less risk. Thanks for being in the audience.

@snorttroll4379 Жыл бұрын

what were you about to do and what will you do now?

@gradosa8272 Жыл бұрын

@@snorttroll4379 I’m paying up my personal debt, so I don’t have to work for personal and business debts.

@TheTruthSeeker756 Ай бұрын

What kind of guarantee does seller get on repayment, because the bank has first lien right?

@DavidCBarnett Ай бұрын

The seller has a lien on the business typically after the bank. So, they need to choose the right buyer and be helpful to them. If the buyer defaults, the seller has the option to take the business back and take over the bank note, usually. But not the obligation.

@hunterbutler2962 Жыл бұрын

Hi David, thank you for the videos and content I love your channel. My question is what percentage of seller finance should a buyer be looking for on average? An example would be a Coffee kiosk that is for sell for $100K, gross revenue of $310K and cash flow of 55K?

@DavidCBarnett Жыл бұрын

It's whatever you negotiate, but I like to make the seller note relate in some way to the amount of goodwill in the deal. I have videos on this topic... kzfaq.info/get/bejne/j851pph0rJnZd6c.html

@kalebbillig3472 9 ай бұрын

Or if they really believe in the success of their business, and the ability of you to grow the business then an equity position as part of the seller financing would be the best deal for the seller

@christiandiorbarcelona3252 8 ай бұрын

Hi David. Does a buyer have credit standing if necessary, even if he has already a structured deal on hand? Or can ordinary individuals with no track records and results qualify to do this even if he is new but knowledgeable and equipt on deal making?

@DavidCBarnett 7 ай бұрын

Whatever the seller will agree to. Do you have a compelling story? See my video about a real 'no-money' deal here: kzfaq.info/get/bejne/frJ-oLKny9XPZnU.html

@kanwalsingh4154 3 жыл бұрын

Hi David, Thanks for publishing the seller note content. What would be the ideal split (%) between the bank and seller's note financing ?

@DavidCBarnett 3 жыл бұрын

Hi Ken, I answered this a few weeks ago, check here: kzfaq.info/get/bejne/j851pph0rJnZd6c.html

@kanwalsingh4154 3 жыл бұрын

@@DavidCBarnett Thanks!

@barbellsandbuckets2476 2 жыл бұрын

Hello David I have a gym in Dallas that I am selling I have a lot of people asking me if I offer seller financing. I am very uncomfortable about doing that and have no idea how to do that and secure that I get all my money.

@DavidCBarnett 2 жыл бұрын

Yes, it makes you want to ensure that you pick the right buyer and you might even want to coach and mentor them to be sure they succeed and you get all the money. These are just some of the reasons why buyers need to ask for it. The difference in price you'll get by financing some of the deal vs not can be significant. Financing is the biggest hurdle for buyers. If you offer a fix, your buyer pool grows and the length of time it takes to find the right buyer shrinks. This is why car dealers always have financing options an hand when people go car shopping. Check out my book 'How To Sell My Own Business' on Amazon to guide you on this journey.

@charlesburns9729 3 ай бұрын

Hi David, is there anyway you could do a owners finance from a buyer POV. I am struggling to understand how to present this to a seller I am currently working with. I'll give you a little background. I'm 23 years old and I'm looking at buy a business that going at 235k. I have looked into getting an SBA but the 10% down is too expensive for me. So I want to present to the seller a "owners finance" deal that works for the both of us. Anything helps, thanks David!

@DavidCBarnett 3 ай бұрын

You have to demonstrate that lending you the money will be a good investment. At 23 this will be a challenge as the seller might think you lack the experience. Also, what if things get into trouble? To pull this off, you'll have to demonstrate that you're capable and show the seller that you have a viable plan and are coachable. It might be easier if you work in the business for some time so the seller can get to know you.

@snorttroll4379 Жыл бұрын

how does one get into a collaborative spirit with the sellers and not an adversarial? same with banks etc?

@DavidCBarnett Жыл бұрын

You have to humanize yourself to them. Show that you're a person that is a great choice to be their successor. Not a walking wallet there to make them rich.

@snorttroll4379 Жыл бұрын

@@DavidCBarnett best strategy to do bond financing in stead of bank financing? I dont like the fractional reserve stuff. thank you. What do you think of jeremy harbour's strategy of issuing a bond and giving the bonds to the sellers when they his clients buy businesses? I guess for regular bonds it didnt make sense before you pass 100 million loans, but maybe that has changed? So my plan for now is to use sellers finance, maybe a little bit of equity from a partner and an expandable bond if that is a thing. that the bond buyers and consultants/brokers/investment banks understand that the loaned amount will increase as I go. which brings my mind to cross collateralisation. best to avoid somehow. thought and word salad. I know. Could you adress each point briefly?

@nicholasharwood6688 10 ай бұрын

So, I always hit up businesses that offer seller financing but the broker automatically says no.

@DavidCBarnett 10 ай бұрын

Nobody wants to do seller financing. Would you agree to lend a stranger money? You need to build a relationship so the seller can make a decision about your chances of success. Asking for seller financing before you've even met the seller is a big red flag for the selling team.

@anthonyd5643 11 ай бұрын

Hey David. Subscribed to your channel. Thanks for this informative video. This is COMPLETELY new to me.v I wanted to purchase just a profitable already existing e-commerce business . How do I begin to engage in a conversation with the seller to find out if they will embrace seller financing? I have never owned a business before so I am completely new to this idea period your help would be greatly appreciated .

@DavidCBarnett 11 ай бұрын

You first have to demonstrate that you're loan-worthy. So, you need to show that you have something significant to invest and that you're capable or at the very least, coachable. So, you need to get to know them.

@anthonyd5643 11 ай бұрын

@@DavidCBarnett Thank you David. When you mention that, does that mean that I need to show credit worthiness? I've never had a business so I have no business credit. Does that also mean that I need to have available cash Or some kind of money?

@Verndoes Жыл бұрын

We sold our business a year ago. A portion of the purchase price is a note. He has ran our successful business, we had for almost 10 years, ran into the ground. Made lots of changes in the beginning and lost lots of customers. Now he wants out, says he wants us to negotiate a lower the note by half of what is still owed. Of we don't want to, do you think this is a mistake?

@DavidCBarnett Жыл бұрын

It's up to you to decide if you want to take a reduced payout or if you want to foreclose on him and take the business back. Whether or not there is a bank involved ahead of you in security would be the first thing I'd consider.

@eiknarfzepol Жыл бұрын

If the business is long gone can she take him to court to pay that money sooner or later?

@wildwoodtop Жыл бұрын

Sir I recently contacted my accountant about seller financing on my personal home and he said it is a requirement by the IRS for me to charge the buyer the current rate the feds have set at the time of the real estate sale / settlement (which is currently 6% 😲) have you ever heard of such 🤨 Has there been a new law implemented lately 🤔

@DavidCBarnett Жыл бұрын

My understanding is that the minimum interest rules apply to 'non-arms-length' deals. Meaning if you buy/sell to a family member.

@khalid4423 2 жыл бұрын

so does 100% seller finance mean the seller finances 100% of the deal? and what is owner finance?

@DavidCBarnett 2 жыл бұрын

Yes. Owner finance, seller finance, seller note, vendor take back, seller carry note, all mean the same things.

@khalid4423 2 жыл бұрын

@@DavidCBarnett Thank you david, Ive been searching for an explanation for so long now!

@jamesgradys3885 Жыл бұрын

@@DavidCBarnett what is the percentage of the do you have to give for a seller financing deal

@kingb468 Жыл бұрын

Can they change the business name. Does your name come off the business bank account? Ein still in my name?

@DavidCBarnett Жыл бұрын

Not sure I get the context of the question. A business can always change its name and would update this with the bank, in that case, tax numbers would remain. If you bought it and did this, you'd be doing a share purchase. Mostly though, you want to keep the name as this is what is recognized by the public. Names can transfer in an asset purchase and sometimes change slightly. You may have noticed that a business can go from 'Dave's Plumbing LLC' to 'Dave's Plumbing (2023) LLC' This could happen because the business was sold.