What are Business Notes

1
What are Business Notes?

• Business notes are created when a business seller
  decides to help finance the sale of their
  business. The note usually equals the difference
  between the sale price of the business and the
  buyers down payment. For example, Tom decides to
  sell his laundromat for 100,000. He finds a
  buyer, Jerry, who doesnt want to deal with the
  hassles and high rejection rates of the
  conventional bank loan approval process, so he
  opts for seller-financing. Jerry makes a down
  payment of 30,000 and Tom creates a Promissory
  Note (or Business Note) with an original balance
  of 70,000.
• Once the seller and buyer have agreed to the
  terms of the financing, they sign the Promissory
  Note, which acts as a contract between both
  parties. Once the note is signed, the seller
  becomes the note holder. Much like a conventional
  loan, Jerry makes monthly payments at a
  predetermined interest rate and term.
• Did you know that Business Notes can be sold?
• Well offer the seller a lump sum today in
  exchange for the Notes future monthly payments,
  assuming the Note meets our purchasing criteria.
  Generally, we need to see that the buyer has made
  the first two or three monthly payments before we
  can bid.
• We try to offer the most flexible purchase plans.
  Well quote for either all remaining or a portion
  of the remaining monthly payments.
• Small-business seller-financing has become a
  great alternative to a bank loan.
• As we all know, the majority of buyers of small
  businesses are unable to secure a bank loan. The
  void left by banks and the absence of any real,
  easily accessible support from the SBA has
  created an ideal environment for the creation of
  seller-financed business notes.