Debt Forgiveness Is The Key For A Successful Sale Of A Business In Today’s Market

The barrier is clear–small business has been hammered by the recession. Revenues are down and choking debt service is pressing businesses into loss.

The response of many small business owners has been an attempt to sell their business to get out of the debt and create an exit strategy before all is lost. Unfortunately, therein lies the problem, as once the revenues drop, the price for the business is too high. The business owner’s objective in selling is to pay the debt off with the sale of the business so he can walk away, but when the value of the business has dropped below the debt level, no one will buy and the small business owner gets frustrated and ultimately must consider harsher options such as bankruptcy or even a short sale with debt still remaining afterward. Hardly the desired result. It’s not a pretty picture, but this is what we regularly see.

The answer is simple: do the debt workout first and then sell the business. Everyone wins. The new buyer can purchase for what the business is worth and the seller can get out of his debt and walk away. This is the answer for those small business owners wanting an exit strategy who are being thwarted by too heavy a debt load that artificially pushes the selling price up too high to attract buyers.

Brokers, recommend our debt workout program. Sellers, call for an analysis.