My husband has worked for a small business for the last 16 years. The current owner is ready to retire and has approached us about purchasing the company. He has offered to finance with a 20% down payment. We have not ironed out all the details as he does not want to sell until the end of the year. My question is, in a situation such as ours, what should we expect to be left in the business checking account at closing. The typical daily balance is around $130,000. We have the 20% saved, but it suddenly dawned on us, we are going to need some working capital. What would be the best way to go about obtaining these funds? Is it common for the seller to leave a pre-set amount in the bank and include that as part of the purchase price?
We do own our home but have 3 young children and are not willing to use any of our personal property as collateral.
When you purchase a business, you need the assistance of an accountant and an attorney to sort out the details and be certain everythin occurs legally. How much money is left in the business account will depend on the business's entity type. If it is a sole proprietorship, then the assets of the business belong to the owner as his personal assets. If it is an LLC, corporation, or something else, then you are purchasing the assets, including bank accounts, unless the owner stipulates otherwise. An attorney can help you.
BizResearcher | Window Shopper | 3/13/2012 - 2:02 pm
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