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Small businesses, by definition businesses that have less than 1000 employees, are often formed by partnerships. The sweat equity of founding partners is often the most efficient way to bring talent to an organization for a relatively low cost at the business's start-up. Over time and in certain cases, one partner will have a change of heart or plans, and wish to "move-on". This partner, for example in a medical practice, will request to be Bought-Out of their equity position in the company.
When buying out a partner, there are a variety of factors to consider, including:
Perhaps one of the most prominent issue faced in this situation is where does the capital come from to allow buying out a partner? The first thought may be to visit your local bank representative. In many cases, depending on how the business was run, this just may not be an option for the company. Lending institutions like stable organizations and major changes such as the loss of a partner just may disqualify a business from the needed additional capital.
You might be surprised to learn that many times a Business Cash Advance can be used very effectively in this situation. Why? Because you already have an existing cash flow from sales on which you can capitalize.
You and a partner are in your third year of running a successful restaurant and your partner wants out. You determine a buy-out price and solidify all the other details of the transition. As the legal owner of the restaurant, you apply and quickly qualify for a Business Cash Advance.
The Cash Advance is large enough to cover all or most of the costs of the buy-out procedure, allowing you to pay your partner immediately, resulting in the business becoming 100% yours. The restaurant continues business as usual, with a portion of the cash flow from your credit and debit card sales going to make payments on your Cash Advance.
Another great point is that since the term of the Advance is always less than 12 months, you can dissolve the buy out cost in relatively short period. Operationally, you gradually use the sales flow of the restaurant to pay off your Cash Advance obligation...so in essence, the ongoing success of the restaurant helps you in buying out a partner. One of many results is less stress on the new single owner or even that new partner.
Turn to the US Business Finance experts to help you secure a business cash advance to help you finance buying out your business partner. Our professionals guide you through this sometimes difficult time by providing assistance in the application steps so you can get your cash quickly. If you have any questions, please contact us as soon as the buy out prospect arises.