Well, it is here… double-digit financing rates in SBA….for the better part of 2 years we have called this day with alarm. It is frankly no surprise but many from all sides of the political spectrum are blinded by the natural tendency to see the rising storm. I like to use the ballroom scene from the classic “The Poseidon Adventure” to illustrate the “boiling frog” tendency of owners to hope for the best in spite of odds.

The reality is that for the next 2 years I believe the rates will be like this. Its the price we pay for the free lending environment of the last 10 years.

Anyway, what is old is new and if you are a baby boomer…time will march on. And you will slow down…it is a buyers market now and those with cash have leverage so you have to use what tools you have to make your business shine in a crowded market. Failing to do so will not end in a pretty way…just like in the ballroom .

Owner Financing has returned and you better embrace it cause even if there is a bank loan…there will more than likely be a seller note component cause the banks are scared….they are taking incremental reserves as I type preparing for more failures. Thats not politics…its real…..go ahead and call a banker and ask them that question. They will tell you yes…we are building safety nets in the balance sheet and that means they will impose terms that protect their business. They do not lend money for the Love of the Lord….the are in the business of making money and hedging risk.

So if you find yourself at the time of needing to sell well get educated on Owner financing and use professionals who have done it many many times.

In these uncertain times, many buyers are facing difficulties obtaining traditional bank loans. However, owner financing offers a win-win situation for both sellers and buyers. Here’s why it’s the best option under the current SBA lending environment:

1️⃣ Increased Pool of Buyers: By offering owner financing, you open up your business to a larger pool of potential buyers. Many individuals who may not qualify for traditional bank loans can afford to purchase a business through owner financing. This expands your chances of finding the right buyer and closing the deal.

2️⃣ Faster Transaction: Traditional bank loans often involve a lengthy approval process that can delay the sale of your business. With owner financing, you can bypass the lengthy bank procedures, allowing for a faster and more streamlined transaction. It saves both parties time and reduces the chances of the deal falling through. SBA loans routinely take 90 days or longer and in uncertain times they drag as the drama in the financial markets trickles down to our little world of main street. You will see commitments and then come the time of close bank withdraw. Commitments and then your pl sees a slight dip…withdrawal. It happens all the time…and guess what the longer you are on the market the worse your deal starts to smell so get your terms in right early and get it off the table.

3️⃣ Flexible Terms: Owner financing allows you to negotiate flexible terms that work best for both parties. You have the freedom to structure the payment schedule, interest rates, and duration of the financing agreement. This flexibility enhances the appeal of your business to potential buyers and helps you find a mutually beneficial arrangement. Banks have strict terms, and rates and there are three parties muddying the water… with seller financing there is great flexibility to make the deal work.

4️⃣ Potential for Higher Sale Price: Offering owner financing can attract buyers who are willing to pay a premium for the convenience and opportunity it provides. By providing financing options, you have the potential to command a higher sale price for your business, maximizing your return on investment. YES it is a buyers market BUT they cant get money either so you as a lender can leverage….but if you do not offer seller financing you will not have that leverage.

5️⃣ Continued Revenue Stream: With owner financing, you can secure a steady revenue stream even after selling your business. The monthly payments from the buyer act as a consistent source of income, potentially allowing you to invest in new ventures or enjoy a comfortable retirement. It helps on taxes, and it helps you weather a turbulent period go forward.

Don’t let the current SBA lending environment discourage you from selling your business! Consider the benefits of owner financing and leverage this powerful strategy to attract qualified buyers, expedite the sale process, and secure a better deal.

Reach out to us for more information on how owner financing can work for you. Let’s make your business sale a success! 💪💼💸

Reach out to Michael Shea Tampa Business Broker at  321-287-0349 or email mike@tworld.com

#OwnerFinancing #SellYourBusiness #SBA #BusinessSale #FlexibleTerms #InvestmentOpportunity