Read Time 2 mins | Written by: CannAcquire
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Are you Considering an Offer on your Business?
As a retailer, you may be considering an offer of purchase from a potential buyer. This can be an exciting time for your business, but it's essential to understand the different types of financing that may show up in those offers.
What are the Most Common Types of Financing?
Here are some of the most common types of financing you may encounter during an offer of purchase:
1. Cash Offer: A cash offer is when a buyer offers to pay the total purchase price in cash. This can be an attractive option for sellers as it provides immediate funds and avoids potential financing issues.2. Seller Financing: Seller financing is when the seller provides financing for the purchase. This can be an attractive option for buyers who may not be able to secure financing from a bank or other financial institution. As the seller, you can negotiate the terms of the financing, including the interest rate, repayment period, and any associated fees.
3. Stock or Equity Financing: Stock or equity financing is when the buyer offers to purchase a percentage of your business rather than the entire company. This can be an attractive option for sellers who want to retain some ownership and control of the business while still receiving funds.
4. Bank Financing: The least common option we see today - is bank financing. When a buyer obtains a loan from a bank to purchase your business, this can be a good option if the buyer has a strong credit history and is able to secure a favourable interest rate.
It's essential to carefully evaluate each financing option to determine which is best for your business. Factors to consider include the overall purchase price, interest rates, repayment terms, and any associated fees or costs, as well as what clauses are in place if a payment is missed..png?width=650&height=500&name=EBITA%20(3).png)
During the offer of the purchase process, it's important to work with experienced professionals, such as lawyers and financial advisors, to help navigate the complex financial and legal aspects of the sale.