Can I Sell a Business Note?

Yes!  It’s very common for business owners to carry a portion of the sale when selling a business, and sometimes, the note can be sold with as little as 2 months of seasoning.

People selling business notes need to understand that typically, there are significant discounts involved, so if you’re not prepared for a 20%-50% discount (depending on all factors involved), then you’d be better off waiting out the term.

To set up your note and transaction ahead of time so you have a note worth as much as possible, you’ll definitely want to hire me to help you put your deal together. (See what happens when you don’t)

The basic info I’ll need to start working on your business note:

  • type of business
  • location (city & state)
  • sale date
  • how note created (seller carryback?)
  • sale price
  • down payment
  • original note balance
  • interest rate
  • term
  • payment amount
  • lien position
  • payor onwership structure
  • payor credit rating (D&B if applicable)
  • personal guarantees
  • value of hard asset collateral (tangible and intangible)
  • value of intangible ‘soft’ asset collateral
  • goodwill value
  • if real estate included (zoning factors, usage, operation history including NOI past 5 years, any other liens and their rate/term/balance, debt coverage ratio)

A Tale of Two Business Notes

These are the documents I generally need to get started and that help me put together the above:

  • copy of the note (front and back, or allonges) – be sure you keep the original note handy
  • copy of the security agreement – you’ll need the original
  • copy of the purchase agreement if purchase-money note
  • copy of the bill of sale
  • copy of closing statements related to creation of the note
  • copy of the appraisal, if any
  • copy of the payor’s original credit application and credit report
  • documentation of payment history

Let’s get started!  I’d love to work with you to ensure that you get the best price and the best service with someone you can trust.  You can email or fax documents to (626)451-0454.

And don’t worry . . . the documentation requirements can seem overwhelming, but my associates and I will be here to help you every step of the way.