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Is 55% down a soild offer?

I had what I think is a very sweet deal until the financing I had allocated for the purchase price and reserve capital fell through. The current owner was in distress and would do anything to sale the business, but because of the delay in my funding he has lost his feeling of distress and has turned the company around. He says he is still willing to sell the business but the price has now gone up an extra $10,000. I am still willing to buy the business but I'm not sure how much money I should offer him down. If the current owner really doesn't fell as if he needs to sale anymore, and the current buyer can only afford to put up to 55% down on the business... What is a fair deal for both parties involved? The reason I can only afford to put down 55% is because I will still need a fair amount of reserve capital. I spoke to a broker and he says anytime someone offers 50% of your purchase price that's a serious offer and the seller should really consider it. What do you think?

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Answers (3)
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Jun 1, 2017
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Rise and Grind
Etowah County, AL

Thaks for the advice.

Oct 25, 2009
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Franchise Advisory Group
PA

Demarcus,

55% down is a solid offer. I am assuming the seller will be financing the balance, which is 45%, plus interest on the the note. Keep one thing in mind however, if he really does not want to sell anymore, it doesn't matter what your offer is, it won't be good enough. Don't fall in love with one business, if you can't make the deal that works for you, just move on to the next one. It seems to me that the tables have turned, and you are more anxious than the seller, but maybe this deal is no longer as sweet as you thought? The price already went up, the business is doing better, and the seller cooled off. Make an offer that works for you and if the seller rejects, move on. There are plenty of fish out there.

Oct 25, 2009

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