Collateral on a Seller's note for an SBA deal

by a searcher from Georgetown University - The McDonough School of Business

3 years ago

I'm having a hard time working through a seller's expectations for an uncollateralized note.  Any thoughts of what can be used as collateral, Obviously the SBA will require the PG and assets of the business, not sure if anyone else has come up with a creative solution.

1 like
240 views
13 comments

searcher from Carson-Newman College

Is this a dealbreaker for the seller? Before I bend over backwards to try and accommodate this I'm going to get everything on the table to negotiate. The "collateral" on a seller note is their knowledge and relationships. They stay in the business, to a degree, and ensure the buyer is successful. If they arent confident in the buyers skills and ability to grow the business they shouldnt sell it to them. If the seller just wants to be done with it and get rid of the business then the buyer has leverage and can likely just say "no".

1 year ago | like reply | 0 likes

professional from Bishop's University

The seller's collateral is the business. If you default, they can take it back if they want. This might be helpful: https://youtu.be/CzbU6DCLsVo

3 years ago | like reply | 0 likes

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