Business Brokers Frequently Asked Questions

What do you offer business brokers?

Security Financial offers business brokers the opportunity to earn generous referral fees. Simply refer your clients who hold carryback notes to us - we'll pay you every time one of your referrals sells us a note. Please remember that your clients may want to use that newfound cash to buy a new business through you.

What do you offer business sellers?

We offer business sellers the opportunity to transform payments from a note they have taken back into cash.

What size notes do you buy?

We buy notes up to $500,000. We have a minimum discount of $2,500 per transaction.

In which industries do you buy business notes?

We work with all types of industries - bakeries, restaurants, dry cleaners, laundries, convenience stores, or gas stations for example. We usually focus our attention on small and medium-sized enterprises.

Are you principals?

Yes. We buy notes for our own portfolio and never broker notes ourselves.

Do you buy notes that are not secured by real estate?

Yes, almost all of our notes are secured only by assets of the business.

Do you appraise the value of the business assets that secure the note?

No. We use the assets as security but realize that their value will usually be less than the remaining balance of the note we are purchasing.

How can my client benefit from a business note?

• A faster, sweeter sale. If the seller advertises that they will assist with the financing, the business will sell faster and for a higher price.
   
• More potential buyers. By taking back a note, sellers can offer buyers more affordable financing (esp. lower monthly payments). Thus there will be more buyers wanting to purchase the business. This gives the seller the ability to choose the right buyer from a larger pool of applicants.
   
• Income potential. Through owner financing the seller has additional income potential. As previously mentioned, sellers have received a cash down payment and will receive note payments over time. They can convert note payments into cash to invest in another business or pay off debt.
   

How much will my client receive for their note?

The offer really depends on a number of factors. Your client will normally receive roughly 70% to 90% of the balance of the note. The buyer's total down payment plus the sale of the note will usually be about the same amount as the seller would have received from an all cash sale of the business. Even though the note is sold at a discount your client will have about the same amount of cash as they would have had had they waited for an all cash business buyer.

Do you buy part of a note or just the full amount of payments remaining?

We buy both. It is to the seller's advantage to sell just part of the note if their cash needs are less than they would get from selling all of the note. We will gladly quote on a partial purchase.

How long does it take to close a business note transaction?

We usually close no later than 15 working days after we have received all necessary documentation from the note holder. It really depends on the responsiveness and cooperation of the note holder - the sooner we get all documents the sooner we can close.

How will my broker fee be paid?

Your commission will be paid by Security Financial when the transaction closes.

How much will my commission be?

Your commission is actually unlimited - we allow you to charge whatever commission the market will bear.

Can the seller be certain that you will fund the note purchase after the closing of the sale?

We can't make an absolute guarantee, but we will make a tentative offer to purchase the note subject to all due diligence being completed within the first 60 days. Assuming the seller has chosen a buyer who is qualified to run the business and has been truthful with both the buyer and Security Financial regarding the profitability of the business, there is no reason we wouldn't buy the note.

How can I submit a note?

Complete our business note worksheet

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