7 years ago, TVG represented a seller who was anxious to sell his business so he could enjoy the fruits of his labor.
Like most sellers he had a number in mind he wanted for the business and wasn’t too keen on the deal structure so long the purchase price matched the desired asking price. We were able to secure a buyer who offered the seller the number he wanted, however, it included a significant amount of seller financing. Despite our urging for the seller to consider slightly lower offers with more guaranteed upfront, the seller decided to take the higher offer with substantial seller financing.
Everything was going great for the first few months and about six payments in, the payments stop and the buyer was in default.TVG client spent eight months and over $100,000 in litigation costs to resume control of his business, which by then revenues were down 50%.
Solution
The TVG client worked hard to reestablish his business and slowly built the business back with revenue and cash flow stronger than before. TVG successfully helped the client sell the business again.
Key Takeaways
- Strongly weigh the cons of a deal financed 100% by the seller
- Trust your gut in judging the character of a potential buyer
- Sometimes in life things don’t go well, it takes grit to survive