IS 90% SBA FINANCING BAD FOR BUYERS?

Curious what you think about this video https://www.youtube.com/watch?v=-ocQGY2LuGE

David Barnett (who I think is around here somewhere) opining that 90% financing doesn't help someone buy a business, it helps someone sell a business, and the extra leverage drives up business prices. He says that if you're buying a business which is heavy on assets, the bank loan makes sense, because if things go bad you can sell the business assets to pay off the loan. However, if you're buying a service business, then seller financing makes more sense, because it's the business "goodwill" itself that's valuable, and if things go bad you can ask for help or negotiate, and worst case the seller can take back the business which is still valuable to them. He goes on to categorize any seller who won't offer significant seller financing as 1) hiding something 2) ignorant 3) doesn't think the buyer can run the business.



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