In addition to negotiating the purchase price for your online business, the sales process for your site may also include a discussion of how the purchase will be financed. It is always the first choice of sellers that the purchase price is paid in full at closing. For some buyers this may not be desirable or even possible. A degree of flexibility with regard to financing is often required to close the sale and it can frequently lead to an increased purchase price or money gained by selling the business.
Financing may take several forms, below are some typical arrangements;
- No Financing - Some buyers are financially able to purchase your business from their existing assets. Although this can lead to a quick sale, as it is not dependant on any outside parties, often buyers will expect a better price for a cash purchase.
- Bank Financing - The buyer may arrange bank financing for the purchase of your business. In this arrangement the seller receives the full purchase price at closing from the buyer’s financial institution.
- Seller Financing - The buyer may request that the seller finance the purchase. Under this arrangement the buyer will pay the seller a down payment and make a commitment to pay the balance in a number of scheduled payments. The financed amount is usually charged an interest fee to reward the seller for financing the transaction. This request may be made for various reasons. The buyer may be attempting to maximize the use of his own capital. Seller financing also represents a statement about the viability of your business and its ability to provide a continued revenue stream capable of covering the finance charges while providing an adequate rate of return for the buyer.
- Various other financial arrangements are possible including profit sharing or joint ownership.
As part of our sales negotiation process, Website Properties will work with both the seller and buyer to find a relationship that satisfies both parties' business requirements.
For more information on the entire sales process please see our Selling Your Online Business page.