Cash Flow Funding, Business Notes, seller financed business note, owner financed business note, owner carry back business note, owner carryback business note, owner carry back, owner carryback

Cash Flow Funding Group

Business Notes

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Business Notes

Have you carried back a note for a business that you sold with seller financing?

Do you need more cash today than you are getting from your payments for the sale of your business?

Are you selling your business and considering using seller financing?

We can help you convert all or part of your seller-financed business note into a lump sum of cash today!

Contact us today for a free, detailed report on seller financing your business! Click here to send an E-mail - Just write "free business note report" in the Subject block.

Business Notes are Promissory Notes or Contracts that are created by the sale of any type of business. These are similar to Commercial Notes except the Business Note is secured by the more limited assets of the business rather than real estate. We will buy your Business Note for a variety of businesses, including:

Retail Business
Manufacturing
Restaurants
Service

Because it is commonly more difficult to get a bank loan for the purchase of a small business than for the purchase of a home many business sales are owner or seller-financed, creating a Business Note. We have cash available for the purchase of your Business Note. This will give you cash today to enable you to start your new business venture! Remember, you do not have to sell your entire note, only that portion to get the funds you need today!

What are the advantages to selling your business with seller financing?

You will have more potential buyers who want to buy your business
With more potential buyers looking, the business will sell faster
By agreeing to carry the loan for the buyer you can get a higher price
No bank qualifying necessary for the buyer
No points or fees associated with the loan to the buyer
Easier for buyer to qualify

What are the typical criteria necessary for selling a Business Note?

If you have already sold your business using seller financing, you may be able to sell it if it meets these typical criteria.

First position liens only
No dollar maximums - minimum typically $8,000 to $12,000
At least 30% to 35% out of pocket downpayment by buyer (a well seasoned note allows considering a smaller downpayment)
At least 3 months of pay history with timely payments by buyer, longer is better
Same location and proof of business profitability for 3 years (at least 4 years for food service industry businesses)
2 years of buyers personal and corporate tax returns and year end P&L statements for business
Minimum FICO score of 625 to 650, or satisfactory D&B report for corporate buyer
Promissory note must be personally guaranteed by buyer
No private or government liens or any unpaid debts

What are some of your options for selling your note?

There are many ways by which you can sell your business note. It is a flexible process that can be creatively designed to fit your specific individual needs.

Full sale of entire note - most cash today but probably not the best option for you
Partial sale - sale of only the number of payments necessary to give you the specific amount of cash you need today.
Split sale - sale of a portion of your monthly payment to give you the specific amount of cash you need today. This allows you to continue to receive some monthly payment.
Combinations of the above, choices of specific payments to sell, etc.

Are you selling your business and considering using seller financing?

There are a number of things you should keep in mind to make sure that the note that you create is one that you could easily sell, if you need to use it to get cash today.

Get at least a 1/3 cash downpayment
Do not make your seller financed sale a second, or lesser, position lien. It must be first or you will not be able to sell it.
Do not combine real estate with your business sale. Separate your real estate sale and your business sale into two separate notes.
Make sure that you seek out and use professional legal, accounting and business advice
Make sure your buyer has a satisfactory credit rating or D&B report
Make sure the buyer has sufficient funds in the bank for operating costs and reserve
Get a personal guarantee from the buyer
Make sure you do not have any liens or unpaid debts
Try to keep the note to 5 years (60 months) or less
Get the highest interest rate that the buyer will agree to
Make sure your buyer has experience in the business that you are selling. If not, increase your price and give the buyer On-the-Job training for the first 3-6 months of their ownership.
Make sure that you get copies of the buyers financial records (2 years of buyers personal and corporate tax returns and year end P&L statements for business)
You should have been in business at this location at least 3 years (4 years for food service businesses)
Make sure that your business financial records are in good condition and demonstrate the profitability of the business

Are you selling real estate combined with your business?

Owners of businesses that include real estate often sell the business in combination with the real estate. This may be done completely as seller financing or with just a portion of the sale being seller financed. Sometimes the buyer gets a commercial loan for the purchase but doesn’t have a large enough downpayment to make up the difference between the loan amount and the purchase amount. The seller often accommodates the buyer by seller financing the difference with a second position note. This note has no value to buyers of business notes. Its value is only to the seller as the buyer continues to make payments on it.

A better structure for the sale would be to split the sale into two separate notes, one for the commercial real estate and one for the business itself. The buyer can use the commercial loan for the real estate purchase and the primary seller financing could then be used for the business itself, leaving it as a first position lien on the business and a salable note. The downpayment would have to be allocated to the two notes attempting to meet the requirements for having a salable Business Note. If there is still a shortfall between the commercial loan amount plus the downpayment allocated to the real estate sale, a smaller second position seller financed note could then be made to cover that difference. This way you would still have the business note that you could sell and get funding from if you need it. If you have any questions do not hesitate to contact us.

Contact us today for a free, detailed report on seller financing your business! Click here to send an E-mail - Just write "free business note report" in the Subject block.

FREE, No Obligation Consultation!

Contact us by phone Toll Free at: 1-866-232-5416

E-mail: info@cffgcapital.com

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