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Does the buyer assume my auto loans when I sell?

I don't have any debt with the business except for auto loans on our trucks. Does the buyer assume these? Do I have to pay them off at close? If so do I addback my debtservice to SDE since the buyer won't be paying?

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Answers (2)
Robert Cutler
Attorney
New York County, NY

Mary, you can structure the deal so that the loans are assumed, although typically in my experience the buyer will insist that they be paid off at closing.

Mar 23, 2010
Jon Holmquist
Edgemaster Model 400 sharpener
President
Marion County, OR

Hello Mary, this question can be handled any way you want to. But a lot depends of the source of your loan. They can demand payment in full or can let your buyer assume your loan, upon approved credit, etc. The cleanest would be to pay them off and include the book value in the purchase price. Obviously the trucks are needed as part of the business. Check with your loan holder to know where you stand.
Good luck, Jon at Edgemaster Mobile Sharpening

Mar 22, 2010

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