Whether your strategy involves a family succession, management buy-out or sale of the business, financing the change of ownership should be a key part of your succession plan.
Finding the right financial structure for the transfer or sale of ownership in your business will depend on your own objectives and the different tax and legal considerations of each alternative approach, which must be weighed along with lifestyle considerations. The success of your deal often relies on your ability to involve the right financial, legal and succession planning advisors to help you sort through and evaluate the different options available.
As a seller of your business, it is important that you evaluate your purchaser's ability to invest in the business early in the process. If the buyer is unable to raise the necessary financing, the closing of the sale could be delayed or even jeopardized. If the purchaser has difficulty raising the necessary financing, it may be advisable to move on to another purchaser, even if you have to accept a lower sale price.