To obtain the maximum value when selling your business, there is a chance you will need to provide assistance to the buyer as they obtain funding.  This might mean an introduction to your banker who is familiar with your company, or possibly structuring the transaction in such a way that the business looks more attractive to a lender.  Either way, in the end you are helping yourself get the best price.

On interesting fianancing mechanism that is typically overlooked by buyers is the 504 loans.  It is only only available for smaller businesses, with  than tangible net worth less than $7.5 million and  not have an average net income less than $2.5 million after taxes for the preceding two years.

These loans are attractive to business owners becasue they are typically easier to get, and have lower interest.  Unlike the traditional SBA loan, they do not have to be used by startups.  Another advantage is that the downpayment is 10% instead of the traditional 20%.

There are requirements such as proving that you are creating or keeping jobs, or providing community development.  The loan amounts can be for up to $1.5 million for most companies, or $4 million for small manufacturing companies.

Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.

These loans are an excellent alternative to the long and restrictive 7(a) loans offered by the SBA, and should help you get more value for your company.  Your M & A Advisor, or Business Broker should have more information with regard to these loans.

Princeton Capital Strategies, llc.
www.PrincetonCapitalllc.com