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Is it possible to entertain the thought of asking a seller of a B2B business from this site to consider lease

Need advice On how to Lease to purchase a B2B business.

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Answers (3)
Buy-a- Company

No smart seller would take a deal where they received no down payment, and just received monthly payments that the cash flow could support. They'd be better off just installing a manager, keeping the company, and keeping the cash flow. I have to explain this to buyers all the time, that their offers make no sense to the seller.

If a company cash flows $100k, and the seller could replace him/herself with a $50k manager, then the business becomes something like an annuity paying $4000+ per month. Why would any seller take $50k down and (hope they collect) $3k per month for 5 years? (Unless they really hated the business or it was a which case the buyer should be cautious of any seller who would take that deal.)

Melanie, are there any assets in the company that you could borrow against? Receivables? What amount of cash down payment could you offer? Could you borrow against your own house?

Mar 31, 2010
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Biz2Credit LLC
New York County, NY


It will better if you can arrange for some kind of financing while around 10- 15 % can come as seller note. When a seller list the business to be sold, it is very rare they will agree to lease it until unless they know some body really well in the past.

The best way to search for financing is to enter you information on If you meet the general criteria of a lender or a bank on the system, you'll be matched with them. If you don't meet any of the lender criteria, the system will educate you as to why you didn't fit the criteria and what you can do to qualify in the future. It's a great system and it's free. Good luck.

Mar 31, 2010
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The BAF Group LLC

It is possible, but getting him/her to agree would be like winning the jackpot of the Lottery. In any transaction, there has to be some semblance of a "win", for both sides. Unless the business is completely unsalable under any other circumstance, where is no real "win" for the Seller, in a lease situation.

If the Seller "leases" the business he/she gives up complete control, with very little up front cash to show for it. With property, the Seller can take back a tangible asset, in the even it does not work out over the long term. What are you going to do with a business? If the Buyer fails in the enterprise, what is there left to take back? In order to re-gain value, the Seller is going to have to roll his/her sleeves up and get involved in the business all over again. And in an overwhelming number of circumstances, the business may be so eroded by that time, that it would defy any attempt to resurrect it.

And in a lease, who is responsible for any liabilities that the Buyer incurs, if the Seller has to take the business back? The Seller never actually sold the business, so legally, is he/she still on the hook for those invoices that the Buyer is now going to abandon when he/she gives up the lease? What a legal nightmare!

With Owner Financing, the same fear is present for the Seller; however, he/she would normally require a large amount down. Many times, Sellers will hold only 50% or 60% of a note for the sale, for this very reason. But then business is out of their hands. They have no continuing liability for the action of the Buyer. And, whether symbolic or not, it makes it far easier for a Buyer to walk away from the business that may have been leased, than it is for him/her to do so when he/she is fully committed to the entity.

Buying a business is not something where you can stick your toe in, to see how cold the water is. (Terrible grammar!) That's something you may try to do when you start a business, and can gradually and build over time. When you ask for highly unusual terms with buying a business, you are frequently asking a business owner to take additional risks on everything they have and everything that many of them have worked their entire lives for; the last and often the only meaningful asset they may have for retirement; you are asking them to risk it all for you, a complete unknown. That is asking a lot! (As a Business Broker, I take that responsibility extremely seriously.)

There are a ton of other issues. I am not saying no one would ever do a lease, on these terms. Every time I say "never", I find an exception. But as a Broker, I see nothing but negatives for the Seller. It would be great for (Attorney) Robert Cutler to have input on this, from a purely legal perspective.

And I apologize for the grammar.

Mar 31, 2010