Archive for May, 2012

Financing a Small Business Acquisition

May 29, 2012

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…)

To Quote or Not to Quote Interest Rates… That is the Question!

May 14, 2012

“What are your rates today?” This seems like such a simple question. However, there is no simple answer to this seemingly simple question.

Interest rates vary greatly based on loan type, loan size, loan term, and lock-in time, region of the county, world markets, bond prices and many other volatile indexes. These factors have a major impact on the movement of interest rates, but this list does not include the most important factor, the specific borrower’s credit score, LTV, DTI, property type, source of down payment, etc! (more…)