Annuity Deals (100% Seller Financing)

by a professional from Wilfrid Laurier University

1 year ago

From time to time I come across models that we have all seen, but when repositioned shed an entirely new light.  Annuity Deals aka 100% seller financing is one of those models.  

Quick and dirty - pay a seller what they want but on your terms###-###-#### years) in "annuity payments".  I saw this concept during a recent training with Carl Allen - curious to know if anyone has entertained paying a deal over 5-10 years versus giving the seller everything up front...

From what I can see, this could be a great way to get started for newbies.  This is definitely a model we're exploring with our roll-up strategy -  nothing new, just a great way to reposition things.

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6 comments

searcher from Indiana University, Bloomington/Indianapolis - Kelley School of Business

Agreed, this model makes more sense in places where 3rd party financing is less possible. In the US, the SBA loan makes this less attractive to everyone. In the UK, I think this seems to be more necessary (although in my experience the sellers still don't like it!).

3 months ago | like reply | 0 likes

professional from Wilfrid Laurier University

Jeremy Harbour calls it WIBO (Work-in-Buy-out) - more or less consult for equity, show them what you can do arrange to buy out remaining business over x term. The strategy works, we're doing it now in 3 different deals, all motivated sellers, zero out of pocket.

11 months ago | like reply | 0 likes

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