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