Business Notes

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Businesses, both with and without real estate, are hard to sell, and the sellers find that they frequently must offer to finance the sale themselves by taking back a promissory note to be paid off by the buyer of the business. Like any other promissory note, a business note requires the business buyer to make payments according to a specific schedule over time. The payments will include a portion of the principal and interest or could be an interest-only note with a balloon payment of the principal amount scheduled sometime in the future.

Once the note has been created and the purchase made, the business seller/note holder has the option to seek out a finance company to purchase either part of the note or the whole note. Although the note will be purchased at a discount — that is less than the face value of the note — the business seller/note holder may need a lump sum of cash to use for other purposes. Under those circumstances, access to a business note buyer can come in handy.

 

 

Click here to visit our FAQ section on Business Notes.