The October 2012 issue of Entrepreneur Magazine contains an article in its “Start It Up” section by Michelle Goodman entitled “Trust funds” that talks about the advantages of seller financing of small business sales for both buyer and seller. I was struck by one insight about the role of the business broker in the transaction.
Often in small business transactions, participation by the seller in financing the sale results in a higher sale price and frequently whether a deal happens at all. Both buyers and sellers should anticipate the issue arising.
In the example cited by Ms. Goodman, the business broker had prepared the seller for the possibility of seller financing, not because the buyer had no other alternatives or was a poor credit risk, but because at allowed the seller to get his business sold at a price and terms he was willing to accept.