Get Cash Now For Your Business Note
BACKGROUND AND FUNDAMENTALS
A business note is generated every time an individual sells a
business and chooses to carry
the financing and collect regular payments from the new business
owner(s). There are
literally millions of dollars in business notes in the United
States.
People are interested in selling business notes for several
reasons. Usually, the
prospective seller has decided that he would rather receive the
lump sum value of the
business, rather than monthly payments. Often that's because he
wants to invest in a new
business. Other times, the prospective seller has an incentive
such as an expensive wedding
bill, college tuition or a retirement trip.
Business notes are very similar to private mortgages or trust
deeds. The main difference is
that business notes are not secured by real estate. There is no
real estate involved. (If a
business is sold and it includes the real estate then a note is
created which encumbers both
the business and the real estate. Often times two notes are
created, one for the business
and one for the real estate).
SECURITY FOR BUSINESS NOTES
A Chattel Mortgage or Security Agreement These agreements list
every piece of collateral
that secures the business note. When working in a state which
accepts the UCC terms, a
security agreement is used; in other states they will find a
chattel mortgage. "Chattel"
refers to the chairs, tables, etc. These items are sometimes
referred to as "F, F, and E" -
furniture, fixtures, and equipment. The agreement will list
everything that is included in
the sale of the business. This is important because until the
time that the loan is repaid,
the buyer of the business can not sell or do anything with that
security until he repays the
debt.
A UCC-1 A UCC-1 shows that the seller has sold his business and
has carried the financing. The UCC-1
filing is evidence of the seller's position as a secured party.
TRANSACTION DETAILS
In order to obtain an accurate quote, it is necessary to have up
to date information about
the note. All quotes will be subject to due diligence by the
note purchaser.
The first critical item of due diligence will be verifying the
credit worthiness of the
payer (mortgagor). The lower the credit score, likely the lower
the offer.
The second critical item is a drive-by appraisal or valuation
with comparisons of similar
houses and neighborhoods. The note purchaser wants to be sure
there is adequate value.
One of the key things many people do not realize is they do not
have to sell the whole note.
The note holder will always receive more money over time if they
only sell part of the note.
We recommend that a note holder determine the amount of cash
needed. A quote can be obtained
telling how many payments will be required in order for the note
holder to receive the
necessary cash.
There are many options available when you have a contract or
note and are trying to raise a
lump sum of cash: 1) sell the entire balance of the contract; 2)
sell a specified number of
payments; 3) sell part of each payment, while continuing to
receive the balance.
About the author:
Would you like to turn your business note into cash? Save time
and money... Work with a professional. With over a decade of
experience, Louise Pointer can help you avoid common mistakes.
Click -> http://www.NationalFundingResources.com
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