Parkwest follows standard methodology when offering a business for sale. The businesses we represent are listed on multiple sites such as BizBuySell.com and BizQuest.com, as well as through contacting Parkwest directly. Once a buyer has identified a targeted acquisition, the next step is to fill out a Non-Disclosure form (NDA). On this form, besides getting to know a buyer, we are also ensuring that the company being reviewed is a correct fit for what a buyer is seeking.
As a general rule of thumb, if the acquisition is under $3 million in purchase price, traditional financing will be backed by various SBA preferred lenders, and the transaction will need to meet the SBA guidelines. A buyer can plan on needing approximately 20% down to acquire. For acquisitions over this amount, it can be private equity, or a combination of down payment, owner financing, SBA backed lending, etc. There are also alternative means for financing as well such as 401k and home equity lines of credit.
What to Expect
Buying a business can be challenging, but it comes with many rewards for those who are committed to staying with the process. The percentages of successful businesses are much higher for those purchased with a proven track record than are pure upstarts. Acquiring is a great way to step into a business model that works. The steps listed are an outline of what to expect during the buying process.
- Sign NDA (Non-Disclosure/Confidentiality Agreement)
- List proof of available funds for potential acquisition
- Receive and review marketing packet
- Conference call with Parkwest Business Partners, LLC for initial Q&A session
- Further information sent as necessary
- Conference call with owners
- Confidential site visit with owners
- Make an “Offer to Purchase”
- Open discussions and further discovery
- Acceptance of “Offer to Purchase” if final transaction amount and offer terms agreeable
- Place good faith deposit in escrow account
- Begin due diligence with accountants, attorneys, and necessary professionals
- Start the funding process with lending institution
- Upon completion of due diligence and funding, sign legal documents of transaction “closing”
- Transition of ownership (Asset Purchase Agreement)
- Begin training with seller
When it’s time to sell your company…Choose Parkwest to help you navigate through the confidential selling process.