This effectively increases the amount of the down payment required to complete the sale and/or the acquisition of some financing from the vendor in the form of a vendor loan. Vendor support and Vendor loans are a very common elements in the sale of a small business. If they are not initially present in the conditions of sale, you may want to ask the vendor if they would consider providing support and financing. There are some excellent reasons why asking the question could be well worth your time. In order to receive the maximum possible sale price, which likely involves some amount of goodwill, the vendor will agree to finance part of the sale by allowing the buyer to pay a portion of the sale price over a defined period of time within a structured payment schedule. The vendor may also offer transition assistance for a period of time to make sure the transition period is seamless. The combination of support and financing by the vendor creates a positive vested interest whereby it is in the vendors best interest to help the buyer successfully transition all aspects of ownership and operations. Failure to do so could result in the vendor not getting all the proceeds of sale in the future in the event the business were to suffer or fail under new ownership. This is usually a very appealing aspect to potential lenders as the risk of loss due to transition is greatly reduced. This speaks directly to the next financing challenge. >>> Business Transition Risk Will the new owner be able to run the business as well as the previous owner? Will the customers still do business with the new owner?
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