I often see Owners frequently have recorded loans to/ from their company. These items likely are resolved prior to close. There are a variety of variables depending on the purchase agreement but in general Ive seen this before several times. If you need further clarification or help dm me directly.

Often sellers will take loans versus paying themselves or taking distributions that might be taxable. It is really a benefit to the seller if they are showing up as assets and should not impact the subject deal. If you see a lot of loans from seller in liabilities (shareholder loans), then it is possibly they have had to lend money to the business to cover operating costs. However, it is not uncommon to see a combination of personal loans in assets and shareholder loans in liabilities based on how some sellers track payments to themselves. If you are doing an asset purchase none of this should impact you at closing.

You really want to look closely at the actual business cash flow ignoring payments the seller has made to themselves. Payments off the balance sheet impact cash on hand but do not impact profitability and the cash flow available to service debt if you own the business and are not making those types of cash distributions to yourself. I hope this makes sense. I am happy to discuss if you have more questions. You can reach me here or directly at redacted Good luck with your search.