Compare Cash at Closing With Seller Financing
Two offers with the same price can leave you with very different risk. Orlando Business Brokers Edge connects sellers with a valuation partner.
Compare when you receive the money, what secures it and which obligations remain after you hand over control.
Put both offers on a cash timeline
Separate cash delivered at closing from a seller note, earnout or retained ownership. Each is a different kind of asset after the sale.
A seller note is money the buyer owes you. An earnout depends on agreed future results, often while the buyer controls operating decisions. Neither should be described as guaranteed cash.
Subtract the debt payoff, transaction fees and expected taxes before comparing what you keep. Ask your CPA to model payment timing rather than simply comparing advertised prices.
Read the protection behind the promise
Have your attorney review security, guarantees, default remedies and any lender subordination. A lien can provide rights without ensuring a full recovery if the business fails.
If a bank finances the purchase, find out how its requirements affect your note. Payment restrictions and priority claims can change the economics of an attractive offer.
For an earnout, define the accounting measure, reporting access and dispute process. Ask what happens if the buyer changes pricing, staffing or the services the business sells.
Trade terms with a specific purpose
Seller financing may widen the buyer pool, but it also keeps part of your wealth exposed to the company. Decide how much continuing risk you can tolerate before negotiations begin.
Agree your transition duties separately from payment. Extended training and consulting time have value and should not become an undefined condition for receiving money.
Qualify the buyer ability to fund the cash portion. A willingness to sign a large note does not establish that they have enough working capital to run the operation.
Bring the open questions to a valuation discussion
You can also separate business value from owner pay and prepare a business lease for buyer approval. These decisions work together when comparing a buyer offer.
Alongside the offer comparison, use the filing schedule to assign agency work. Confirm the transaction advice with your own CPA and attorney.
Put your sale questions on the table
Request your free valuation discussion or call (407) 555-0183.