Business Brokerage Blog

This is a blog discussing the many intricacies associated with selling/buying a business.
Category >> Business Financing

Buying a Business??--Now is the time!!

Posted by: Fernando Simo

Tagged in: Untagged 

 

In one of my recent articles, I discussed the impact the current recession has had on the Business Brokerage world. I indicated that one of the major reasons for the negative impact has been the inability of buyers to get financing to purchase a business, particularly larger businesses-- I recently heard that the average price reduction in Florida businesses sold over the last two years, compared to the previous two years, is between $150-$200K. 
 
Now for the good news! The light at the end of the tunnel is getting really bright!! Buyers normally get financing from three key areas: Commercial Banks, the seller, and the Small Business Administration (SBA). I believe these areas are becoming a lot more flexible in providing financing today than just a few months ago. As the financial markets and the banking system go back to some degree of normalcy, Commercial Banks are more receptive to providing business loans. Likewise, sellers are beginning to understand that without a significant amount of seller financing, their business will not sell and they may have to wait months, or years, to sell their business.  
 
Most importantly, the SBA became a lot more flexible by making changes to the acquisition policies impacting purchases which included Intangible Assets. These changes give “Preferred Lender Providers” more flexibility to provide business loans WITHOUT going through the SBA for final approval. In addition to providing “PLP’s” with greater flexibility, the changes give buyers more leeway in what regards the minimum amount of equity they must invest for the project.
 
Wonderful, right?? So, with greater levels of financing available and businesses sale prices at their lowest level, there has never been a better time to buy your dream business. Now is the time!!!
 
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at fsimo@tworld.com or please visit my webpage at www.bizbuyorsellflorida.com .

 


WHY IT MAKES SENSE TO PROVIDE SELLER FINANCING IN THIS MARKET

Posted by: Fernando Simo

Tagged in: Untagged 

Let’s face it, many buyers today are hindered by their ability to buy because banks are unwilling to provide business loans as easily as just a few years ago.  It is, to say the least, difficult to get financing.  As a result, seller financing have now replaced commercial banks to cover the gap.  In this market, if sellers fail to provide financing, they may not be able to sell their business, period!  Here are some reasons why sellers should provide financing:

1. Higher Interest Earnings.  In today’s market, your bank savings may generate between 2-4% interest earnings.  Seller financing normally is above 8%.


2. Buyers Become more Confident.  A buyer who knows you are willing to finance has a greater confidence level on the purchase of the business.


3. Generates More Potential Buyers.  Your market will increase by those buyers who need financing and cannot get it through the banks.


4. The Seller will not be Subordinate to a Bank.  Normally, SBA loans required a 10% subordination to their loan—until the loan has been repaid.


5. Less and Simpler Documentation.  Documents between buyer and seller are significantly less complex than with Banking Institutions.


6. Much Faster Closing.  Only the seller and buyer are involved.


7. Higher Buyer Qualification.                                                                                                                     

8. More Seller Control.  Normally, seller financing has as collateral the business assets.  So, in case of default, you may get your business back plus all the monies you have already received.


9. Higher Sales Price.  You may be able to increase the sell price of your business by 15-20% higher than those without seller financing.

So, if you are a seller, think about it.  It may be to your benefit.

Should you want to know more about selling or buying a business, please contact me, Fernando Simo, at 407-361-8886 and/or visit my webpage at www.bizbuyorsellflorida.com


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Contact Us

 

Fernando A. Simo, P.A.
O: 407-992-8487
C:407-361-8886
fsimo@tworld.com

Testimonial

“Fernando is a go getter! If you want something done and done right, ask Fernando. He quickly became a leader in our industry and a heavy hitter here at Transworld. If you are considering selling or buying a business, Fernando is your best bet!!” June 28, 2009 .  Andrew Cagnetta, CEO and President of Transworld Business Brokers, LLC

I have known Mr. Simo for approximately 5 months.  I met Mr. Simo through Business Networks International, a highly professional business development organization.   Throughout his tenure, he has exemplified the utmost professionalism.I feel very comfortable recommending Mr. Simo as a great resource for your business brokerage needs.

Stephan Boehringer
TOLS Multimedia

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