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| Why should I not ask for the total consideration for my business to be paid in cash? |
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Answer: Because this way you will restrict the pool of potential buyers with significant negative implications on the final price you will obtain. The majority of buyers are not strategic buyers or investors. They are prospective entrepreneurs who will unlikely have available in cash the total amount required for the acquisition of the business.
The settlement of the purchase price in installments will bear interest at a rate normally higher than the one you would obtain if you placed your cash in a bank deposit or bonds, enabling you to obtain a “higher” price than an all-cash transaction, - e.g. with an interest rate of 9% in less than 5 years the amount of € 100 grows to be € 150.
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