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A shortage of cash to take over a business need not stop a buyer from proceeding if he or she can use one or more of these methods to raise additional funds before taking over the business.
A surprise that some entrepreneurs encounter when buying a small business is that the amount of money expected to go into the purchase will not cover every expense involved in becoming the new owner. Not only is it necessary to come up with the down payment, but in order for the business to succeed the buyer will need working capital when taking over. Smart strategies for raising that extra money include:
1. Seller Financing: If the deal calls for an all cash purchase, and the buyer is emptying his bank account to pay off the seller, perhaps the agreement can be modified to include a promissory note to be used by the buyer for part of the... read more