Codie SanchezFounder @ Contrarian Thinking

Get Paid to Buy a Business...

12 Jan 2024 · 1 min

Watch on YouTube

0:57

Short YouTube video by Codie Sanchez explaining seller financing as a way to buy a business where the seller carries the note. Key points: use business profits to service payments (allowing a higher purchase price), seller receives a larger after-financing sale amount, taxes can be spread over years (lower annual tax hit), and seller-financed deals can close much faster than SBA loans (potentially in days vs ~90+ days). The video gives a concrete numeric example to illustrate these benefits and notes not every deal will qualify.

Questions this video answers

$750,000

$80,000

$1.15 million

$1.2 million (speaker states seller gets to take home 1.2 million)

Spread over 10 years: ~ $7,000 per year instead of $70,000 at once

Chapters

Imagine this. You get to know a business owner and they want to sell you their company and they pay you for it. Well, kind of. It's using something called seller financing. And here's what you need to tell them in order for them to do this for you. One is if they let you pay with the profits from the business, you'll raise the overall price. Look at this. I'm going to give you an exact example. If you buy a $750,000 business with loans, you give 80k in interest to the bank. If you buy at 1.15 million with seller financing, offer the seller a lower interest rate than the bank would take. The seller gets to take home 1.2 million and you get to pay using the business's profits. Two, they'll pay the taxes out of the sales spread out over 10 years, so they pay 7k a year instead of 70k all at once. 3. It can be really fast. This way. SBA loans can take more than 90 days on average seller financing. If you're good, you can get it done in a week. Looks like this. It's not easy. Not every deal will work out this way, but now you know it's possible and you can work backwards from there.