In an article published in The Secured Lender on March 9, 2023, Jeff Cunningham advises businesses to be on the lookout for an increase in seller-financed M&A activity in the coming months. Jeff explains how owners who desire to sell can expect to accept reduced purchase prices or accept the risk of seller-financed payments over time.
“Some will choose to keep their businesses and continue to operate them,” he explains. “Some, however, will view seller-financed payments over time as no riskier than continued operation of the business itself, and will opt to sell. For them, seller financing may present an attractive alternative to holding onto a business or accepting a drastically lower sales price.”
Jeff further discusses seller financing transactions and the various forms they can take, as well as additional considerations to keep in mind.
“In the current climate, room exists for bargains between sellers and buyers. Buyers must accept the risk of at least some absolute payment obligation in exchange for the potential reward of outperformance. Sellers may accept the risk of contingency of at least some portion of the purchase price in exchange for the potential reward of a greater absolutely value if the buyer is successful.”
Click here to reach the full article: The Rise of Seller Financing.
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