The Truth About Unrealistic Business Buyers

I wake up every morning and spot a few more gray hairs in my beard.

I can blame a lot of things - getting older, genetics, maybe some sleepless nights as a small business owner.

But I’m ignoring those for the moment and instead blaming one thing today.

Business buyers making absurd offers.

I see offers come through with structures of 50% seller financing, 50% bank financing. The percentages may change, but the structure is always the same.

The buyers? Out of state with no industry experience and no plan to replace the owner.

And the supposed bank financing they will line up? They’ll have it secured by the assets of the business with no personal guarantee.

Buyers who submit these offers will assure you they know what they are doing but when you ask for references of similar deals they’ve closed in the past, this is always the first one.

This is my warning for business buyers, you submit an offer like this and don’t expect to ever be taken seriously by that broker again.

You are asking a seller to take a massive risk on you when you aren’t putting up any of your own money…and the bank will have the first claim on the assets if something goes wrong should you magically secure the financing.

There are two places these offers come from: real estate investors and people who have spent too much time following fake gurus peddling lies online.

Do not expect a seller to give a single penny of seller financing unless you are putting money into a deal.

As brokers, we know your likelihood of closing is near zero. If you do manage to close, your likelihood of successfully operating the business from a distance and paying back the seller is near zero too.

The sellers won’t take that chance and I don’t blame them.

If you aren’t prepared to put money down at closing, you aren’t prepared to buy a business.

Let me know what outlandish offers you see in your industry.