When sellers offer financing, they are almost always in a position to sell their business faster and for a better price, and when buyers know this is an option upon viewing a listing, they are much more likely to move to the next step and contact the a buyer
San Francisco, CA (PRWEB) February 9, 2009
BizBuySell.com, the Internet's largest marketplace for buying or selling a small business, announced today that its database of over 50,000 business-for-sale listings will now include details on whether or not business sellers are willing to offer financing to interested buyers. The financing details will appear alongside other essential information such as business description and location, asking price and cash flow. Additionally, aspiring small business buyers will be able to search for businesses that have indicated they are willing to provide seller financing, and can sort listings using the seller financing criteria.
BizBuySell.com launched the option for sellers to include financing details in listings to address the concerns of a small business economy that has made it increasingly difficult for buyers to independently secure financing at a seller's asking price. According to BizBuySell.com General Manager Mike Handelsman, it is more important than ever for sellers to consider financing at least a portion of a sale - and if they decide to do so - to make it known to potential buyers at the start.
"When sellers offer financing, they are almost always in a position to sell their business faster and for a better price, and when buyers know this is an option upon viewing a listing, they are much more likely to move to the next step and contact the a buyer," Handelsman says. "With financing details now included in BizBuySell.com listings, buyers can find the right businesses more efficiently and sellers can expedite the sale process."
While seller financing can significantly speed up business-for-sale transactions, Handelsman says the decision whether or not to offer financing is not one that sellers should make without being properly prepared, and offers the following advice for sellers who are unsure:
- Assess the risk - While a cash sale is essentially a risk-free transaction for a seller, an owner-financed transaction means that the seller can be tied to the business for a period of years after the sale is complete. If the business succeeds, the new owner pays back the principal with interest, but if the new owner is unable to make the business profitable, the seller could suffer the loss of interest income, incur additional costs to collect the debt, and could possibly end up owning the business again if the new owner defaults on the loan. As such, business sellers should feel comfortable enough with the outlook of their businesses under new ownership before they decided to make the financing decision.
- Consider the benefits - If a buyer stands out as a good investment risk, the seller can reap substantial benefits from self-financing. Partially-financed sales typically result in a price that is more than 15 percent higher than their cash sale counterparts, meaning willingness to finance can be used as a bargaining tool during negotiations. Also, a financed sale can garner a much higher rate of return than many other investment vehicles with a five to seven year note at 8 to 10 percent interest as the norm.
- Know how much to finance - Generally speaking, it's in a seller's best interest to finance no more than 1/3 to 2/3 of the sale price. If a seller decides to finance more than that, there should be a legitimate reason for doing so.
The new seller financing criteria also has significant value to business buyers, who now have the ability to greatly narrow their search and more quickly and easily identify listings for which owners are willing to finance the sale.
"BizBuySell launched this feature with the convenience of both buyers and sellers in mind," says Handelsman. "Now, serious buyers and sellers can more effectively connect and close more successful small business transactions."
BizBuySell is the Internet's largest and most heavily trafficked business for sale marketplace, with more business for sale listings, more unique users, and more search activity than any other service. BizBuySell currently has an inventory of over 50,000 businesses for sale, and more than 800,000 monthly visits. BizBuySell also has one of the largest databases of sale comparables for recently sold businesses and one of the industry's leading franchise directories.
BizBuySell was founded in 1996 and acquired in 2004 by LoopNet, Inc. LoopNet operates the largest commercial real estate listing service online, with more than $475 billion of property listed for sale and 4 billion square feet of space for lease. With over 2.5 million members, LoopNet attracts the Internet's largest community of commercial real estate. For more information, visit http://www.bizbuysell.com.