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Selling Your Business Note And What You Need To Know For A Successful Deal
Successfully Selling A Business Note
Need to sell your business note? Selling your business notes is a regular business practice for most large companies and small business owners. But there are people with private business notes that are as familiar with the importance of keeping their business notes in good standing when they may be ready to sell for a lump sum of money.
Just imagine taking the steps to selling your business note and getting your quote just to find out the note buyer will not touch your note with a 10 foot pole. You can find out now by calling your attorney what your status if you don't already know.
There are businesses sold everyday where a person can sell while owning no real estate to speak of. In the case of default the business can go back to the original owner. Owning real estate is not necessary.
Business Note Owners Have Sold Various Businesses such as:
- · Dry Cleaner
- · Staffing Company
- · Hair Salon
- · Laundromat
Information To Selling A Business Note
Note buyers only purchase business notes that are in first position, which mean if you have a loan (lien) from a bank they may be in first position for any monies in the case of bankruptcy or the like.
There is a securitization of a business note called UCC-1 (Uniform Commercial Code) Filing (just as a trust deed secures a mortgage note) that expires in 5 years and can renders your deal useless if you’re in the market to sell.
No reputable note buyer will do business without the UCC Filing (standerdized set of rules to govern all business transactions). Talk to your attorney if you have a business note. UCC Filing information can vary in each state. A business note owner has to know what is going on with their assets at all times.
What A Business Note Buyer Looks For
- Be in 1st position (no liens again business note).
- Best price with 30% down payment.
- Buyers credit worthiness.
- Amount of payments your selling.
- Buyers status. LLC or Corporation
- Have a signed UCC Filing agreement (good for about 5 years).
- Be seasoned (payments made) 2 months or more, 6 or more months is great.
Discounts will vary between investors because there are factor that in the above that will be considered. The discount will be 10 to 30% off of the full amount of payments sold.
Once you successfully sell your business note you will have gone through the whole process making you more comfortable in the future when selling more payments. Having a trusting relationship with your note broker is vital when you need questions answered or a status report. The ultimate purpose is to get you the best discount before selling your business note.