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Diversified Funding Source ServicesServices > Business Notes
 

Diversified Funding Source offers service you can count on!

Diversified Funding Source offers the following business note services:

  • Lump sum for business notes
  • Partial purchase of a business note
  • Assistance in structuring a business sale to optimize the value of a business note
  • Business broker consultation / participation

Existing Business Notes

If you have already sold your business and have an interest in selling all or part of your business note, contact us for a no obligation estimate of value.

Creating a Business Note

If you are considering the sale of your business and would like information on structuring the sale to optimize the value of a business note, contact us. We would be happy to send you our Business Sellers Guide to Creating and Selling a Business Note.

Business Brokers

We work closely with business brokers whose clients are considering a seller carry back financing option. Call us to see how we can financially help both you and your client!

Business Note Top 10

The following are the ten most significant areas looked at in determining the value of a business note. It should be noted that these are guidelines that often have exceptions. Strength in one area can offset deficiencies in others.

Each business note is unique and our consultants will be happy to assist you in determining the value of your note.

  1. Your note should be in 1st position. Notes subordinate to an SBA or commercial bank loan attract little to no interest from funding sources.
  2. Get the largest down payment possible. Down payments of 33% or greater are preferred.
  3. Attempt to get the highest interest rate and the shortest term possible. Funding sources will normally only purchase 5 to 7 years of payments. Notes longer than that will often result in what is known as a "partial purchase". This option often benefits both the seller and buyer of the payments. We will be happy to explain how.
  4. Avoid balloon payments if possible. The most attractive notes fully amortize in 5 years or less. Balloon payments present some uncertainty and the associated risk may diminish the value of your note.
  5. Try to avoid early payoff clauses. Funding sources assume that your buyer will execute the early payoff and they take that into account when making an offer on your note. You can always approach your buyer later with an early payoff offer.
  6. Sell to a credit-worthy buyer. Since the buyer of your business will be making the note payments, their credit and payment history are important.
  7. Seasoning. You should expect to carry your note for a minumum of 3 to 6 months before being able to sell. We can often generate interest in a note before that, so give us a call right away. We can get a lot of the paperwork done ahead of time to get you your cash sooner.
  8. Real Estate. A business note secured with real estate can be more valuable since it reduces the level of risk.
  9. Pricing. An overpriced business will put downward pressure on the value of the note. A business should have the ability to easily handle the financial payments.
  10. Use a reputable and knowledgeable cash flow consultant. Take advantage of our knowledge of the business note market. When it's time to sell all or part of your business note, let us bring you the highest possible offer from proven financial sources. We look forward to working with you and being "Your Source for the Funds You Need Now!"
 
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