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INTRODUCTION Hello. My name is Eric Gall. I am a business
intermediary with Florida Business Exchange in Southwest Florida. If you are looking to
sell your business, you likely have quite a few questions about the process. This video
short is one of 18 I have created in a series to answer your most frequently asked questions.
WILL HOLDING PAPER IMPACT PRICE? A common concern business sellers have is
“Will holding paper impact price?” The answer is yes, Holding a seller note often
significantly increases the sales price of a business. For example, studies show for
a business listed for $150,000, sellers that demand 100% of funds at closing receive just
under 70% of their asking price or $105,000; whereas, sellers providing some form of seller
financing have on average received over 86% of their asking price, or $128,000. This is
nearly a 16% difference, or $23,700. Plus, the seller will receive interest on the outstanding
balance of the seller note. A seller note is referred to keeping skin in the game. Keeping
skin in the game gives a buyer confidence you believe the business will continue to
be successful and thus, they are willing to pay a significantly higher price for your
business. If you are confident in your business and the buyer to perform on a seller note,
holding paper will allow you to receive a higher price.
CONCLUSION Thank you for listening. If you have any questions
about this topic, or any other topic, please do not hesitate to contact me at 239-738-6227
or eric@buysellflbiz.com. I'm here to help you prepare your business for your eventual
exit.