WHAT’S A FAIR PRICE FOR A BUSINESS?

Your average buyer would have no way of knowing whether the business is priced fairly. How then does a buyer determine if the business has been priced fairly?

I CAN HELP YOU DETERMINE THE FAIR PRICE OF A BUSINESS

Businesses are priced according to multiples of cash flow.

Due Diligence is the process where a buyer whose offer has been accepted by the seller, may examine all financials.

Businesses that are LENDER PRE-QUALIFIED have had their 3 years’ financials thoroughly examined by an SBA lender (bank). The bank focuses on whether there is enough cash flow for a buyer to make payments. Confirming there is sufficient cash flow for payments on a business loan, the SBA bank will loan the full asking price with only a 15% down payment.

Because the bank has reviewed the financials – much like a buyer would do themselves during due diligence, they will generally loan from 3x-5x cashflow for the purchase of the business.

For example – a business creating $200k cashflow would be priced at $600k with only $90k down.

BUYING A LENDER PRE-QUALIFIED BUSINESS ELIMINATES PROVING CASHFLOW DURING DUE DILIGENCE .

ADVANTAGES OF BUYING A LENDER PRE-QUALIFIED BUSINESS:

• Financials have been reviewed and approved by the SBA lender (bank)
• SBA will loan FULL LISTING PRICE of business.
• SBA requires only a 15% down payment
• Lender Pre-Qualified purchase simplifies Due Diligence – SBA lender has already determined cashflow and has approved a fair selling price based on cash flow created by the business