| Buy a Business with Seller Financing |
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1. Better Loan Terms from Banks
Deals involving seller financing are more attractive to lenders, since it mitigates risk of the seller bailing out. Lenders feel more confident funding acquisition deals that involve seller financing.
2. Large Equity Coverage
According to the SBA's standards, seller financing counts towards 10 percent of the overall equity required for buying business.
3. Capital Gains Savings
Capital gains tax is 35 percent of the gains. Through seller financing, the seller receives money incrementally rather than one lump sum payment, substantially lowering the tax liability. |