Seller Financing your business when you sell the business- What if the Buyer Runs the Business Into the Ground?

Guest post by: Scot Cockroft
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11 Important Points You Need To Know When Buying A Business - By Scot Cockroft

You and your endless seller financing concerns…

First, you’re confused whether the option is free from risks or not, then you brood about getting your money back and finally, it’s the fear of losing your business into the hands of the buyer that’s haunting your mind.

No, I don’t blame you for any one this. It’s a part of life to consider just about every aspect of an option before actually going for it-especially when our first lesson at school says, “Look before you leap”. And in my humble opinion, this is truly a great habit to adopt. So, whether it’s about considering the option of seller financing or buying a new car for son who just turned 18, inspecting all aspects is just as essential as finding answers to your doubts and fears.

In the case of seller financing, most sellers are concerned about the future of their business, which of course after the deal, will be in the hands of the buyer. You know that there are 5 guarantees that come with seller financing but you aren’t sure what would happen if the buyer mismanages the business or perhaps fails to understand it or something similar happens leading to a complete business failure.

Oh come on!

You’re still having a personal guarantee man. You don’t need to fret about a falling business. The purchaser is responsible to pay just about any amount that is being owned. It’s a huge misperception that the personal guarantee loses its value in case of a business failure.

As far as a personal guarantee is concerned, it stays in effect even after a business failure or after the inexperienced buyer has succeeded at running the business to the ground. But he story doesn’t end here…

What’s needed the most in this scenario is something beyond monetary protection. Would you be able to see your company in a destroyed or ruined state? Would you stand a bad investor or an inexperienced business man derailing or dragging your business through the mud? Of course, you won’t!

And that is why, I advise my friends to take a number of preventive measures that’ll help secure the future of your business. Let me be clear here. Throwing caution to the wind is like making a fool out of you. So, in the coming articles, I’ll shedding some light on the measures that’ll help you make a well-educated decision.

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Seller financing your business- how to make sure you will get paid!

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The Power of Seller Finance to sell your business

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DON\'t reject seller financing when selling a business because of stupid reasons!

Want to buy a business? Don’t use a non-binding letter of intent.

Dealing with Debt when selling a business

How to guarantee that you will be paid when seller financing when you sell your business.

Business Financing: Using Business Seller Financing

5 more seller finance options to consider when selling your business

Buying or selling the Perfect Business

The importance of choosing the right buyer when selling your business

What is a 'Covenant Not To Compete' when buying or selling a business

The Truth about Seller Financing your small business when you sell it (Part 1 of a lot of parts!)

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When selling a business - What is a Seller Earn Out?

When selling my business - The importance of choosing the right buyer for your business

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11 Important Points You Need To Know When Buying A Business - By Scot Cockroft

About the Author: Scot Cockroft

RSS for Scot's articles - Visit Scot's website
Scot Cockroft is the owner and president of Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com). Huntington Business Group was named #1 Business Broker in America in 2010 with Scot Being named "Deal Maker of the Year" by the Dallas Business Journal. Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North and West Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies . In 2007, Scot was named the Most Valuable Intermediary in the World. This is considered the most prestigious award within the industry. Scotâ€™s passion to serve business owners is unparalleled. He consistently provides clients with creative and innovative methods to market and sell their businesses. In fact, some of these methods for marketing and business presentation have changed the way businesses go to market. He is committed to a â€œdifferentâ€ type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two. As the leader of Huntington Business Group in Dallas, Scot believes that each and every client deserves seasoned business professionals who provide the personal attention of a local office while also offering the resources of a world-wide organization. In addition to overseeing the recruiting, training, and mentoring of VR agents to assure their effectiveness, integrity, and ultimate success, Scot also serves on the board of several nonprofit organizations including Heritage Christian Academy.
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More from Scot Cockroft
Dont leave $money$ on the table when you sell your business
Finding Purpose behind buying a business
Seller financing your business how to make sure you will get paid
Another guarantee to keep you on the safe sidewhen selling your business
Protecting Trade Secrets when selling your Business

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