{"id":7365,"date":"2023-04-14T13:17:34","date_gmt":"2023-04-14T13:17:34","guid":{"rendered":"https:\/\/nichetwins.com\/?p=7365"},"modified":"2023-09-25T20:26:01","modified_gmt":"2023-09-25T20:26:01","slug":"financing-options-when-buying-a-content-site","status":"publish","type":"post","link":"https:\/\/nichetwins.com\/financing-options-when-buying-a-content-site\/","title":{"rendered":"#07 | Deal killer \ud83e\udea6 (Selling Part 2)"},"content":{"rendered":"\n

Time kills all deals.<\/p>\n\n\n\n

Take selling your business, for example.<\/p>\n\n\n\n

So much can go wrong.<\/p>\n\n\n\n

Your business could take a turn for the worse.<\/p>\n\n\n\n

Deal killed.<\/p>\n\n\n\n

Your buyer could get cold feet and begin second guessing everything.<\/p>\n\n\n\n

Deal killed.<\/p>\n\n\n\n

You main supplier could go out of business.<\/p>\n\n\n\n

Deal killed.<\/p>\n\n\n\n

Your display ad provider could have a rouge 29-year-old employee add his personal Chase account as the payee for a $9,149,001 payment from Google, rendering the ad provider insolvent just as you’re about to sell your website.<\/p>\n\n\n\n

Deal killed.<\/p>\n\n\n\n


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Sh*t happens<\/h2>\n\n\n\n

That last one is a true story<\/a>.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Well not the insolvent part. Ezoic survived.<\/p>\n\n\n\n

But they truly were at “risk of becoming entirely insolvent” from the incident.<\/p>\n\n\n\n

And it happened just a few months ago, while I was in the middle of selling my website.<\/p>\n\n\n\n

You know, the website that had Ezoic display ads all over it?<\/p>\n\n\n\n

Ya, that one.<\/p>\n\n\n\n

Fortunately this event went under the radar, the funds were recovered and my sale went through.<\/p>\n\n\n\n

But the point is, sh*t happens.<\/p>\n\n\n\n

Sometimes entirely unforeseen sh*t.<\/p>\n\n\n\n

And given enough time, that sh*t will kill your deal.<\/p>\n\n\n\n

Buyer financing<\/h2>\n\n\n\n

Which is why thinking through the type(s) of buyer financing you allow when selling is so important.<\/p>\n\n\n\n

At the very least you should understand timeline implications.<\/p>\n\n\n\n

Cash<\/h3>\n\n\n\n

Cash is king. Pretty straight forward. Cash buyers can move quickly. My cash buyer was able to close the deal in just 23 days (full timeline breakdown below).<\/p>\n\n\n\n

Bank loan<\/h3>\n\n\n\n

Also fairly straight forward. Buyer goes to a bank and applies for a small business loan. Banks are usually pretty strict with their lending criteria for SMB loans. They require a ton of documentation, and the process can take a long time. But interest rates are generally favorable.<\/p>\n\n\n\n

SBA loan<\/h3>\n\n\n\n

I could write 10,000 words about the Small Business Administration and the SBA loan process, but here’s the gist: The SBA is run by the federal government. Its purpose is to help fund small businesses in America (up to $5MM in funding). SBA loans have an “SBA guaranty” meaning the SBA will reimburse the lender (the bank) for a percentage of the debt (up to 90%!) if the buyer ends up defaulting on the loan. This reduces lender risk and can increase a small business owner\u2019s chance of getting approved for funding. Again, banks are usually strict to approve these. Lots of documentation is required, and the process can take a LONG time – 108 days in my case (full timeline breakdown below).<\/p>\n\n\n\n

If you want to geek out a little bit, here is a real world breakdown of an SBA loan from a buyer that intended to purchase my blog.<\/em><\/p>\n\n\n\n

About this loan:<\/p>\n\n\n\n