In a perfect world, all sellers would finance the sale of their business and realize the additional financial gain associated with the loan interest. It seems like a great opportunity until the buyer decides not to pay the seller. So what are seller financing pros and cons today?
First, most small business owners have an immediate need for the cash or capital generated by the transfer of the business. The seller may be planning to purchase another business, retire or need the money for any number of other reasons.
Any of these reasons make financing the purchase and sale difficult for the seller. The seller’s CPA would be quick to point out certain tax advantages to be enjoyed by the seller but at the same time reluctant to recommend financing most buyers. (more…)