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Eight Key Steps to Selling Your Business and Cashing In  by: Afra AmirSanjari This year, some 700,000 American businesses will be sold. Most will be small and mid-sized businesses like yours. If you, too, are thinking of selling, consider these practical steps for making the process go smoothly. Determine a Realistic Price Range Understand the Tax Consequences Prepare for a Sale Seek Potential Buyers Negotiate Your Deal Sign a Sales Agreement Plan for the Closing File Paperwork With the IRS Now for the GOOD STUFF! Getting the Cash Out of your Business Note Business notes, known more specifically as seller carryback business notes, are created when the buyer of a business can not or will not pay all cash. Frequently, banks and similar lending institutions are hesitant to loan money to new business owners who have minimal track records and where hard assets make up a small percentage of the total purchase price. In the case where a buyer cannot obtain a loan, the seller is left with two choices (1) hold off until he/she find a buyer who can pay all cash or (2) carry back a note in order to collect future payments. The first option is often not realistic. In the second case, the seller is hopefully able to at least extract a large down payment to make extra sure that the buyer has some "skin in the game". However, even then the seller is usually in a position that he prefers not to be in – he has no lump sum of money to either invest in other opportunities or to retire. Unlike a real estate note, where is there is a hard asset that is fairly easy to appraise; the business note is relatively risky to hold. So, what is a business seller to do when he didn’t want to be in the lending business to start with and now has a need for immediate cash? What many people don’t realize is that the business note can be sold. The former owner can sell all or part of the note to get a lump sum of cash. In this way, both the goals of selling the business and getting the cash out of it are met. In summary, selling a business note is an excellent way for the former owner of a business to get his cash out of the business. Whether the reason for selling the note is that the seller would have preferred all cash all along, that he now has large debts to pay, or that he has the opportunity to pursue other investments, the sale of a business note is a tool of which you should always be aware. About The Author Afra AmirSanjari is the Principal for Peacock Capital. Peacock Capital specializes in solving the cash flow challenges of Small/Medium Businesses, Government Vendors and Individuals with innovative financial solutions by providing a network for securing operating capital. http://www.peacockcapital.com info@peacockcapital.com This article was posted on January 06, 2005 Read More Articles from the "Business and Finance" Category: Why Are House Prices Still Being Misquoted - (Part Two) by amos graham Business & Career: Know Your Ruling Star! by James Clayton Napier Delegate to Accelerate Success! by Ed Sykes Web Conferencing: A Boon to Businesss by Denise Bridgens Why Your Customers Go Elsewhere by Jennifer Jordan Choosing An Ideal Debt Consolidation Loan Company by Paul Rogers You're Not Alone by Andre Taylor Building Good Business Credit After Bad Credit by Gerri Detweiler Don't Just Sit There, Write A Newsletter Article by Vern Anderson Low Rate Secured Loans UK: Gears You Up To Fulfill Needs At Cheap Rates by Johns Tiel << Back to "Business And Finance" Index

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