Types of Financing

Seller Financing
Seller financing for qualified buyers is the most common form of financing the acquisition of private companies in the UK. This type of financing is a vote of confidence to both the buyer and the financing institution. Seller financing is usually structured as a term loan and follows a unique financing structure:

• The seller only pays tax on the down payment and not on the note amount.

• The seller gets a good return on his or her money and a monthly income.

• Seller is protected because he or she gets monthly P&L, Balance Sheet, Right to Offset, etc.

• If buyer gets into financial trouble, the seller already knows because of the monthly reports.

• Together they work out the problem; the seller potentially does not receive a payment or two, but business continues.

• Business continues, buyer’s down payment is safe and seller's note is safe.

• Employees jobs are safe, creditors are comfortable and clients continue to receive goods and services