What is the standard to buyout a seller financed note?
The man I purchased my business from wants me to buy him out early. I bought the business is 2008 on a five-year contract at 7 percent. He wants me to pay him all of the principle in 2009. I understand that contracts are usually purchased at a discount. What is the standard operating procedure on this type of buyout?
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You can also research public companies in your industry. Chances are it is going to be much more discounted and in your favor. It is very difficult to figure out a realistic evaluation in this market. It is a completely different market from 2008. Most businesses are down over 40 percent and the S&P 500, which was down 37 percent last year and nearly 3 percent this year. If raising cash is not an issue, negotiate hard.