Many
restaurant owners are willing
to finance their business.
When we list a restaurant for sale,
we let the owner know that
owner financing shows the buyer
that the current owner feels like
another operator can be successful
in their location.
The current owner is willing
to share the risk by owner financing.
Much like a bank, the owner who
is willing to provide financing of his or her
business will look at your ideas, your business plan,
as well as evaluate your experience.
In doing this the seller determines if he/she will
finance the business for you.
Financing your business
by a seller is a vote of confidence
in your plan and
a shared investment in your success.
If you have a great idea,
and knowledge of what you want to do,
and the experience to make it work,
you will qualify
for owner financing
of a restaurant.
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Seller Financing
Should you finance a buyer who is purchasing your business?
Carrying back a note for some or all of the purchase price
may be the only way to sell the business,
since banks have fairly strict lending criteria for acquisition
loans.
Moreover, seller financing can provide a tax break
for you if you qualify for installment sale treatment.
For the buyer, seller financing can be a godsend
because you'll generally have more relaxed qualification standards
and more lenient terms than a bank would have.
Mechanics of seller financing. The simplest way to provide seller
financing
is to have the buyer make a down payment .
The business itself, and/or the significant business assets,
provides the primary collateral for the note.
A lien on the property is filed with the secretary of state's office.
Aside from its simplicity, this type of deal can be very flexible
—
you can adjust the payment schedule, interest rate, loan period,
or any other terms to reflect your needs. .
Most seller financing will be for a relatively short term (say,
three to five years)
Owners may ask for a Personal Guarantee
and the Assets of the Business are used as Collateral
Attorneys draw up paperwork which protects the interests of
those involved in buying a restaurant with Owner Financing.
There are many ways to structure the seller-financed sale
that make sense for both buyer and seller.
Creative financing is an area where we at Atlanta Restaurant Exchange
can be of help.
We can negotiate a variety of payment plans that, in many cases,
can mean the difference
between a successful transaction and one that is not.
Serious sellers owe it to themselves to consider financing the sale.
By lending a helping hand to Buyers, they will, in most cases, be
helping themselves as well.
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