How to purchase inventory with acquisition?

by a searcher from Florida State University

1 year ago

What are some creative ways to purchase inventory with the acquisition of an existing retail business? The owners wont consider consigning it to us, and the current SBA rates are high. They say they don't know exactly (piece by piece) what they have in stock to know what they purchased vs what we purchase. Thank you!

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searcher from Florida State University

The business price plus inventory remained under 3x, and post DS cash flow was still ok, so we went for it. Unfortunately they accepted another offer. Thanks all.

1 year ago | like reply | 1 like

intermediary from The University of Chicago - Booth School of Business

I presume you have worked out the price and the inventory included in the price. Now, due to interest rate you are exploring not buying the inventory at close. Seller would not give you inventory on consignment. Makes sense. An option is to lock the inventory in a cage, let seller have the keys, you use the inventory in the cage as you need it and pay for it. You agree not to buy from outside if it exists in the cage.

1 year ago | like reply | 1 like

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