NCC
is an industry leader in all forms of seller financed business notes,
corporate buyouts, partnership buyouts, etc. Ed Lisogar has literally
written the book on the subject, "The
Business of Business Notes", as you can see at the "Instructional
Manuals" page at this site.
Please
Note:
We are not lenders...we
will not "loan" anyone money to buy a business, buy
out a partner, invest in a business venture, etc. We buy
the seller financed paper...the promissory
notes,
cash flow, etc. created when a business is sold.
That's what we do.
Please
Note:
With very few exceptions
there is no market for second position business notes. If the
note you or your client has for sale is behind an SBA loan, or is in
any lien position other than first, we will not have an interest.
Please
Note: As of
January 2006, our typical maximum investment into any one business or
corporate transaction (where there is NO real estate involved as collateral)
is approximately $300,000 to $500,000. However, please note we are just
as interested in smaller "Ma and Pa" transactions as we are
in multi million dollar deals. Our minimum investment is generally $8,000
to $12,000, all things being equal.
Additionally, we will generally not be interested in investing into more than 5-6 years on any one business note.
Business
Sales w/ real estate:
Business sales where real property
WAS included as collateral are a totally different animal and will be discussed on a transaction by transaction
basis. In these cases (called "Hybrids") where the sale price is a combination of business as well as real property value, we will typically look to invest into the note based on the value of the real property only, maintaining an ITV in the 60%-65% range.
If that level of investment will work for the seller, head for the Worksheet page at this site. Complete and submit
a Business Note worksheet outlining all details INCLUDING the value
of the real estate included in the overall sale.
While
we typically require minimum levels of cash down payment
at the time of the sale, equity stake,
seasoning, personal obligation, etc. (as
outlined below in the
company underwriting criteria), we consider each transaction on it's own individual
terms and strengths.
The financial strength
of the Payor is paramount. We assume in our underwriting that
the note will fail and we therefore must look to the backup. Debtor
financial strength is key as is the collateral securing the note and
it's performance.
Every deal is reviewed
on a transaction-to-transaction basis. A brief e-mail is the way to
get a dialogue started.
Several different
programs are available to pull capital out of the note in question.
A full liquidation will always be the worst way to go as the discounts
inherent to this area of the secondary market are large. Please inquire
as to the options available such as a "partial" or "split
payment purchase". NCC's "Three Way Program" is highly
recommended on business note quotes…Let NCC's team of negotiators
give your deal the greatest chance of closing
Should you have
a business or corporate note that you would like to submit for review,
please check your specific deal against the underwriting criteria below
to ensure it meets minimum requirements. Submit utilizing the Business
Note Worksheet found at this site.
TYPICAL BUSINESS NOTE BUYING CRITERIA
-
No "Simultaneous
Closings"
-
Minimum 3 Timely Payments Required
-
Promissory Note personally guaranteed
-
Minimum 650 FICO credit score on Buyer(s)
-
"Typical" Minimum: $12,000
-
30% cash, "out of pocket" down payment (Versus borrowed or financed) …Will consider less
down if well seasoned
-
Same location and proof of business profitability for two
years*
-
Two years of corporate tax returns/year end profit & loss
statements on business and Debtor
-
Confirmation that buyer had previous experience in the business
in question
-
Yields "typically
Start at 20%
All business note
submissions are subject to underwriting approval, and are reviewed on
a transaction by transaction basis.
* Food service
businesses (restaurants, bars, deli's, etc.) require at least four years
minimum operation at same location, same format. Certain exceptions
may apply (sizable cash down, longevity at existing location, etc.).
Call to discuss.
