Seller financing is like the whole grain of business investing. It's very common to use seller financing methods to purchase a laundromat. It's not exactly free; you are still paying money for it. Furthermore, it's the business buying itself for you, especially if you can negotiate 100% seller financing, which is also possible. A lot of the time, laundromats prefer seller financing all over the part of the deal. Seller financing is applicable when the seller needs a certain amount of money or none right now and prefers to get a few thousand dollars per month. In this case, the seller acts as a bank and lends you the money secured by the business they already know about and run. It can be an attractive option.
Besides, just having steady asset-backed income for some period can dramatically reduce the amount of tax they pay. Let’s say a seller is selling a laundromat for 500,000 dollars. If you go out and get a loan, you put down your down payment, and the loan pays off the rest of it. They have 500,000 dollars, and they have to pay taxes over 400,000 dollars a year. This can change their opinion about how taxes impact their earnings. That’s a lot of money, and most of the time the seller asks for only a smaller portion or no money at that moment. The seller asks to negotiate an ideal amount of raw finance money, or they just ask to pay them every month like rent or a loan. Hence, the business is buying itself for you; it's not free.
It's quite helpful when you have very little or no money in your pocket, and you are getting business for free and then letting that business pay for itself. It's a powerful way. If you get loans, whether these are SBA loans or loans of any other kind, it could be a huge pain. It could be too simple and appropriate to get seller financing.
Present some benefits of seller financing to the seller who is hesitating. Tell him it could be a perfect tax advantage for you, which is one of the three legs of the tax tripod: cash flow, equity, and tax advantages. At the same time, they can get cash flow and tax advantages right there by offering seller financing. That’s a great deal for them. It's always worth asking about their plans with that money or what they will do with that money. If they don’t have any plans, tell them, let’s skip the ups and downs in the stock market and all the stress they could bring. Let’s just get a loan that is backed by the business that you know how to run.
So, seller financing is the first and, great way to own a laundromat for free.
Various advisors of Bizben have expertise in communicating the deal between the buyer and
seller. They particularly work to minimize the taxes and help both parties get more out of the deal. They can help you negotiate with the seller and agree to the seller's financing professionally, making the whole process seamless.
Contributor:
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups.
ServingSouthern California
Cheryl's a restaurant business broker, over 25 years in the bar and restaurant industry coupled with a J.D. Cheryl works tirelessly to create successful strategies and effective negotiations for those who wish to purchase a new or sell an existing bar, restaurant, cafe, or night club. 415-309-2722
ServingCity Of San Francisco
If your business involves alcoholic beverage sales, we can help. Obtaining a liquor license transfer or selling a business with a license in California does not have to be a frustrating and overwhelming process. We have procured thousands of licenses for our clients.
ServingAll Of California
Laundry consulting, due diligence, buyer representation: We preview laundries for you and evaluate them. 28 years laundry industry experience: buying, selling, valuing, retooling, analyzing, consulting services for laundry buyers and entrepreneurs in California. Contact us today about our services.
ServingSouthern California
Laundry consulting, due diligence, buyer representation: We preview laundries for you and evaluate them. 28 years laundry industry experience: buying, selling, valuing, retooling, analyzing, consulting services for laundry buyers and entrepreneurs in California. Contact us today about our services.
ServingSouthern California
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
ServingSan Francisco Bay Area, North Bay, Central Valley
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