It is quite common for a potential buyer of a business to shy away from an attractive transaction based on the misconception that most, if not all, of the purchase price must be paid to the seller at the closing. Viewing the purchase price as an absolute value that needs to be exchanged at the closing usually leads buyers down the path of taking out home equity loans, borrowing funds from friends and family, or dipping into savings or retirement funds. In reality, the requirement of a full cash payment at the closing is a rarity.
There are many ways for a buyer to go about funding a purchase transaction without plunging immediately into deep debt or attaching personal assets as security. Sellers generally expect that the purchase price will be paid via a combination of several methods and that the payments will be staggered over a period of years.
