“Seller carry” is a legitimate way to secure a business purchase in certain scenarios. It basically consists of the financing made by the selling party of a portion of the sale over an extended period.
This might be a reasonable course of action in the event that:
* The buyer doesn’t have all the funds available
* The bank won’t lend the remaining amount
* The seller, nonetheless, still wants to go ahead with the sale
Notwithstanding, there is a lingering temptation on the part of investors to keep sellers on a leash via a _seller carry note_ that could function as an additional “warranty” of sorts, beyond whatever other warranties found in the Asset Purchase Agreement (APA in short). If a seller agrees to the issuance of this seller carry note, the buyer is thus reassured that the former will not try to “cut and run” when serious problems arise.
There is nothing wrong with exercising a bit of caution, particularly when you buy a business in New York City (of all places). Alas, this fear can get a bit too far and we can end up pushing away a good seller for no discernible reason.
It should not surprise us that putting such a burden on the seller is not appreciated, especially whenever the buyer has all the means to pay the required amount. When we push it too far, asking for a seller carry can become a giant deal-breaker. For this reason, business brokers advise against opting for this route save for special circumstances.
Bank Financing to Buy a Business New York City
If you decide to buy a business (NYC and elsewhere), banks actually _do _finance a large sum of the investment price, contrary to what many would believe. Most often than not, this financing represents a whopping 90% of the asset’s value, which is the maximum percentage guaranteed by the US government-backed SBA (Small Business Administration).
Unless you genuinely have a bad credit score – in which case, you’re not eligible to buy a business in New York City in the first place – getting credit for a sizable portion of a small business’ purchase price should not be overly difficult. A competent business brokerage firm can offer assistance in this regard and direct you to highly affordable and reliable lenders.
Situations could arise, however, in which investors don’t have the remaining 10% or they need to fill a 5% gap, in which case, seller carry notes are a good alternative. Be advised that seller carry notes should not wholly _replace_ the loan but rather serve as a means to mend the fence when available funds are not enough.
The only reasons you’d want the seller to assume an exceedingly high percentage of your purchase in lieu of a bank is because:
* As said earlier, you don’t trust him/her; or
* You’re not actually a suitable buyer under the criteria set out by virtually every professional business broker, to begin with, if only because you’re not in good standing with financial institutions
Either way, the seller’s confidence in you wanes and he/she might even feel offended by the proposal. It’s one thing to abide by the “settled accounts keep old friends” motto, and another one to go the extra mile and call good faith into question beyond necessary.Read More
People looking to buy a business in New York City would want to be informed about the best deals from the most trustworthy sellers. Nevertheless, sellers will also want to look for the most reliable investors in a short span of time. Stick around to find out how to proceed from a seller’s point of view.
Best Methods For Finding Investors Intending to Buy Business New York City
Unless you are the owner of a big company, the best way to get the needed exposure for your business sale is by doing some advertising work.
Insofar as people who are on the lookout to buy a business in New York City would turn to certain mechanisms for finding a good investment option, a seller also ought to be aware of what these mechanisms usually are and tackle them. This is ascertained through a process called “market analysis”.
Nevertheless, as of the time of writing, these are the most common strategies utilized:
1. INTERNET MARKETING
Gone are the days when you had to go to a physical building or call the local newspaper to buy space in its classified section. The internet has roughly overridden this tedious process and has streamlined advertising so that, in many instances, you don’t even have to pay.
There is a great array of internet sale sites, but many of them offer membership plans. If you’re not financially able to acquire membership on every one of those sites, you might try at least the most popular ones such as bizbuysell.com [https://www.bizbuysell.com/] or axial.net [/axial.net]
2. Email Marketing
This is mostly applicable to business brokers since they’ve been already establishing networks and connections with other buyers, brokers, venture capitalists, and private equity firms.
Sometimes, the optimal way to target investors looking to buy a business in New York City is through the broker’s email address book. A brokerage firm very likely has a more extensive list of people who already authorized them to notify whenever a new business is up for grabs, so the process of looking for buyers becomes a bit more immediate.
You may also take advantage of the email lists provided by sites such as bizbuysell.com, albeit the relationship is not as personal.
3. “INSIDER” OR “STRATEGIC ACQUIRER” CAMPAIGN
Through this method, we would target business owners in the same sector who may wish to merge our company with theirs, expand into your local market, or increase their business group.
This type of marketing aims at keeping our dealings away from the public eye while also directing our efforts towards people with a proven track record, basically making the screening process a lot easier.
However, it demands a bit more effort on the part of the marketers, since they would need to get a hold of email addresses, telephone numbers, and/or LinkedIn connections, as well as to try to get in contact with them numerous times until they get an answer.
4. Print Marketing
The printing press is not out of the woods, yet! Though this is probably the least efficient method nowadays, owing to the widespread use of digital means. Nevertheless, publishing our campaign in a magazine catered to a specific industry may help arouse the interest of possible candidates potentially looking to buy a business in New York City that matches your proposal.
Finding a suitable buyer is just one milestone in the long process of selling a business. New York business brokers can make the process a lot shorter by assisting you with their expertise and extensive knowledge in the field of business sales.Read More
If you’re in Long Island and are looking to sell or buy a business, a good Long Island business brokerage firm can help boost the chances of landing good deals.
But the work of a business broker is not reduced to finding good buyers and sellers. They should be endowed with sufficient qualifications and expertise in the financial, technical, and legal aspects of business buying/selling to assist you through most of the burdens involved in every stage of the process.
WHAT IS BUSINESS BROKERAGE LONG ISLAND?
Business brokerage consists of the assistance provided by individuals or firms in all the operations related to buying or selling a business. This assistance comprises the following tasks:
Business brokers are instructed to assess the market and find the businesses that match the criteria and parameters laid out by an investor/buyer. A Long Island business brokerage firm should be more than equipped to show potential buyers the best investment opportunities for their needs.
In terms of selling. the business broker ought to be qualified for analyzing the financial situation of all interested buyers and to aid in choosing, from a pool of potential investors, the best prospects in terms of credit score, liquidity, capital, and professional experience.
Surely you know how much your business is worth, but probably by heart! This is, frankly speaking, not enough to convince investors. You’ll need to show spreadsheets and measurable data that can be easily verifiable. A business broker walks sellers through the arduous task of doing an accurate business valuation to make sure that they’re not overpricing or under pricing their ventures.
In the “small” world of business brokerage, Long Island agents and firms would most probably know and associate themselves with the m0st trusted banks in the area, which should generate confidence at the moment of choosing the best bank in which to apply for a loan. The broker is also theoretically knowledgeable about the most efficient ways to get financing approved.
Long Island business brokerage agencies should be thoroughly trained and updated with regards to the regulatory framework for business purchasing and selling. You won’t have to deal with the cumbersome task of finding out how to do all the paperwork. The broker should streamline the process so that you won’t skip any form or fee.
Posting an ad for your business is really not that hard, but you won’t be capable of getting noticed unless you have an adequate understanding of how positioning and marketing strategies work. In that sense, a competent Long Island business brokerage agent is versed in the most effective tactics aimed at driving traffic to your ad. He/she can also help you find the best business marketplaces to ensure that your business gets the necessary exposure to spark a negotiation.
If there is anything that business brokers excel at is in the art of negotiation. We, as investors or sellers, can be very emotional about how we handle a deal, which is why it’s crucial to find a third party that can keep things “professional” and right any possible wrongs in the negotiating table so that any tensions in the relationship between buyer and seller can be alleviated before they escalate.
Hopefully, we’ve been able to support the reader in ascertaining the basic functions performed by a business broker and how a good Long Island business brokerage professional or firm can smooth out any rough edges in all the phases of purchasing or selling a company.Read More
Throughout history, we’ve been taught that the best way to succeed in life is by starting our own business. All things considered, it was the way in which many of the biggest emporiums existing nowadays began, sometimes with just a passing idea and not much else. These days, however, to fast-track your career as an entrepreneur, it’s a far better option to buy a business in NYC rather than going through the hassle of beginning from scratch.
Unquestionably, the chances of appearing in the biggest business publications and being featured as a role model in motivational books and speeches diminish considerably, but you will definitely profit from having some foundations already placed for your business adventure, bypassing all the boundaries set by the current marketplace and just focusing on productivity and revenue.
BUY A BUSINESS IN NYC
As expressed before, you get a bunch of benefits when choosing to buy a business in NYC. New York City is considered by many to be the “financial capital of the world” and the largest center for trading in the US and beyond. As you can imagine, you will get overwhelming competition that, in all respects, can obliterate your chances to be situated under the spotlight of your target audience. Notwithstanding, business selling is an extremely normal practice in huge urban areas like New York, and it’s a very profitable trade for all parties involved.
Some of the benefits include:
HIGHER CHANCES OF GETTING A LOAN TO BUY BUSINESS IN NYC
Revenues are hardly ever obtained without sacrificing some capital first. This is one of the primary reasons why people have borrowed money historically, especially through financial institutions, at times in exchange for interest rates which can reach very onerous amounts.
Banks don’t just give out money to anyone and their mother. For a loan application to be approved by your bank, you must present a very credible project with clear and tangible expectations. Luckily, the odds of getting approved for a loan to purchase an already established business – especially one with a solid footing – are much higher.
A WORKING BUSINESS
Assuming you decide to buy a business in NYC that is currently operational, you can rest assured that you’ll save copious amounts of money and stress in the meantime, for you won’t have to struggle with the ordeal of enlisting staff, opening bank accounts, setting up departments, filing gigantic loads of paperwork, and dealing with the uncertainties of treading unexplored territories. Others already did that for you!
AN ESTABLISHED BRAND
NYC is not a friendly place for advertising. This may sound ironic considering the gross amount of marketing material popping up in every corner of “The Big Apple”, but that’s precisely the problem! When you’re not the only business in town that can provide a given value proposal, you get dimmer chances to shine in the eyes of potential customers.
The moment you buy a business in NYC, you will be reaping the fruits of possibly years-long efforts of promotional work that have solidified the brand, particularly in such a crowded city.
This business should be expected to have an existing client base, its own social media accounts, and a working flourishing website or online shop. All you would need to do is to keep the momentum, which is not easy, but certainly more attainable than building a follower or client base from nothing.
Get Professional Help
If you are planning to buy a business in NYC, selecting a competent business broker to help you out is a must. With the aid of a legitimate business firm, you’ll be properly equipped for choosing the best deals, as they assist you with filtering through all the potential businesses that match your criteria.
Additionally, NYC business brokers are thoroughly trained to cope with all the technicalities involved in the process of buying a business, including (but not reduced to) compliance measures, the drafting (and filing) of highly technical documentation, all the legal and financing procedures involved, and all the aspects of any bargaining process.Read More