Get Your Business Funded: Creative Methods for Getting the Money You Need

What's in It for the Buyer?

Of course the first thing is that owner financing should enable you to get into a business that you might not otherwise be able to get into. That is huge. But the benefits to you go far beyond that.

First of all, that the owner is willing to finance some or all of the sale should be of comfort to you as it is proof that this really is a good business; otherwise, the seller would not finance it. Financing a lemon is a sure way to get a deal breached since you would have little incentive to keep making payments on a business that loses money. If the seller believes enough in this business to be willing to finance it, you should believe in it too. Seller financing proves you are likely making a smart choice.

Of course, seller financing will also allow you to get into the business with little or no money down, and that in turn should enable you to retain what cash you do have to run the business. Better to have your money in your hands than the ex-owner's hands. He will get his share down the road, when you can better afford it.

In addition, since a common clause in an owner-financing arrangement is that the owner will stick around and help and teach during the transition time, you will have a great shoulder to lean on. Learning about the business from the person who ran it successfully for many years is the sort of business home run that does not come around very often. It truly is a unique and valuable factor.