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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.
HOW MUCH CAN I CHARGE FOR HOLDING PAPER? Another important question regarding seller
financing is how much interest can you realistically charge for holding paper? Because a seller
note does not come with loan origination, insurance and other fees, you can often charge
more than a bank. Banks typically charge the prime lending rate plus 2%. The average prime
rate from 2002 to 2009 was about 5%. Therefore, as you can see from the chart, nearly 90%
of all seller financed loans between 2002 and 2009 charged above the average bank rate
of 7% interest.
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.