Business Note Buyer – Getting The Most Cash For Your Note

Buying or selling a business requires a lot of paperwork, but having access to a good business lender makes things easier.

You may be able to get some money out of selling your notes to a reputable company.

Guidelines for Business Notes

Here are some factors that we consider when evaluating a business note. Although we prefer to have all of them, missing any one of them is often okay if the others are particularly good.You need at least $10,000 for a down payment, but ideally you’d prefer to get more than that.At least one payment was made by the customerA personal guaranty from the customer, and the customer should have a good credit history without any recent major delinquency.If you’re going to sell your business, then you need to be sure that the business has enough profit to pay off its debts.The term must be six or fewer, with no large balloon payments at the time of purchase.Performing 1st liens only

We specialize in helping small companies grow their revenues by selling business loans. But we don’t just focus on one type of company; we’re flexible enough to help any kind of business succeed.

Business owners often sell their business loans by paying off only part of the loan balance at a time. For example, if they owe $100,000 but want to pay off only $50,000, then they would sell $25,000 worth of these loans. Doing so allows them to get a better price from potential buyers because they’re not trying to sell an entire portfolio of loans when there may be no takers.

If you want to sell your business, prepare now.

You may have any number of reasons to sell a company. Maybe you have an interesting opportunity in another part of the country. Or, perhaps your current company has too few or too much work for you to manage each day. Maybe you’re tired of working so hard and would rather spend more time with family and friends. Whatever the reason, if you’re ready to make a change, selling your company might be the best thing for you right now.

Whatever the reason, offering owner financing will usually attract more prospects and raise your asking price. Consider these points before deciding to offer owner financing:What is the real worth of the company? Of course, the best indicator of the worth is what a reasonable purchaser would buy the company for. Before getting to that stage however, find out what comparable companies in your region have recently been bought for, and consider hiring an expert to assess the company. This at least gets you started, and you can then adjust up or down to account for any special features of your own business.Potential buyers will want to know the following before making an offer: (1) the price they’d be willing to buy at; (2) if there were any recent financials available; (3) if key people were willing to stay on; (4) if they had any information about their largest clients.If you want to sell your own business, are you willing to agree not to compete with the new owner? What do you believe would be reasonable, and would a potential purchaser expect?Will prospective purchasers be likely to be able to do all-in-one offers (not likely in any industry), and would lenders be willing to fund the deal? You might want to speak with two or three financial firms to get an idea of what their lending policies are likely to be. Unlike with real estate, most of the worth of the company could be in the good will instead of the physical assets, so the property is likely to be rented rather than owned. Lenders are rightfully concerned about how much to lend when so much of the worth is in the good will. Most deals involving the sale of a company involve at least some type of lender financing.If you were asked to sell the company using an unsecured loan, and the buyer later defaulting, would you be willing to take it back? And is it likely to look any different than it was before you started selling it?After selling the business with owner financed loans, if you plan to continue collecting the monthly payments from the borrower, then you should consider keeping the notes for yourself. If you plan to sell the loan to a reputable business loan buyer, then you should not hold onto the notes.

Setting Up A Business Note

Once you have sold your business with owners financing, you may wish to locate a reputable business brokerage firm to assist you in finding qualified buyers. A knowledgeable business lawyer will also be a crucial member of your team during the sale. These professionals can provide objective advice about your company, the sales procedure, and how best to evaluate the various offers. They can also advise you about protecting yourself financially and legally. Your team will also likely include people who can offer assistance in helping you manage your personal finances and legal affairs.

Once you’ve sold your business, it’ll be important to get your lawyer to draft all relevant legal papers for you. Two of these critical papers include the promissory note, and the security deed. These two pieces of paper show how much money you owe, how often payments are due, what would happen if you fail to pay, etc. When the deal is complete, you’ll want to keep the originals of both notes in a safe place. You may also want to keep copies of them somewhere else, just in case. Finally, you’ll want to create a copy of the security deed so that you can give it to any potential buyers who might buy your business.

Be sure that the customer has the skills and experience needed to operate the enterprise. A customer who lacks the ability to manage an organization properly is unlikely to maintain the firm successfully and thus make payments on your debt. If you have any doubts, consult your lawyer about including provisions within the contract that allow you to periodically examine the books of the corporation. Additionally, you might want to include in the agreement that you have the right of access to important clients so that you can ensure that the enterprise is doing well.

Although a 10 percent down-payment is recommended above, getting a larger down-payments make the note safer and more attractive for you, as it reduces the odds of a future default. If the buyer can put in a down-paymenet of 20 percent or even 40 percent, that would be helpful. Be sure that the down-paymenent is all cash and not made up of other kinds of property or like-kind items such as stocks or bonds. A business note buyer wouldn’t lend full amount if the down-paymennt was not all cash.

You should always run a credit report before purchasing a business loan from a lender. If they ask for a copy of your credit history, be sure to provide them with one. Business notes buyers will typically want a credit score of 650 or above, but even a slightly lower score will allow you to negotiate a better deal.

When buying real estate, one must be careful not to purchase property without making sure that the seller has personal liability for any debt associated with the property. If the seller doesn’t have personal liability, then you may end up having to pay off the loan yourself.

As an example, let’s say that current mortgage rates are 6%. If you were to offer 7% for 30 years, then the total cost would equal $1,000 per month. However, if you were to charge 12% for 30 years, the total cost would equal approximately $2,500 per month. Therefore, charging a higher percentage means that you are accepting greater risk.

Make sure that you keep records of all payments and keep copies if there is ever any dispute regarding the note balance. This will be useful for any potential buyers of your business.

Selling A Business Note

You may choose to sell the full notes, but if you’re not comfortable doing so, you can always sell part of them. We are one of the best brokers for business notes, and we offer the highest level of service.

Here is an overview for selling a real estate investment property note.If you contact them, they will ask for information regarding the loan, including the name of the company, their address, phone number, email address, etc. They may also ask for a signed note and/or a signed contract.Once the seller has all of the necessary info, they will make an initial offer to you. If you accept their offer, you’ll be able to purchase all or part of the item. If you decide to keep the item, you’ll get a refund for any unsold portion.If you want to proceed, the business note purchaser will request some additional details from you, including the payer’ s name, address, phone number, email address, bank account numbers, and any other relevant payment details.Once the investors have everything that they need, the investors will send the notes back to the holders for their signatures. The holders sign the notes and return them to the investors.When the bank sends the money to the new owner, he/she will then write a check to the old owner and mail it to her/him.You’ve already sold your part, so you don’t need to worry about anything else. Spend the money however you’d like.

Selling Part Of A Business Note

If you’re interested in making money from your business notes, you might be able to sell them for cash right away. However, if you’d rather get paid when you need it, you could consider offering partial purchases instead.

As an example, suppose you had a loan of $250,000 that was due in 5 year at a rate of 7%. You wanted to pay off half of the loan amount ($125,000). We would then make a partial payment of $6,750 per month for the next 24 consecutive month. At the end of those 24 month period, you can either continue to make partial payment until the entire balance is repaid, or you can decide to sell the remaining portion of your loan. Either option works out just fine for you. Let me know if you have any questions.