If i wish to purchanse the shares of my two partners how do I finance the purchase price.
The partners wish to be paid out in cash, and i do not have extra availability on my borrowing base.
Ways to finance the buying out of ones partners?
Answers
Anon - Will the partners accept a note payable to them for a generous interest amount? If you cannot pay them outright, and you do not have availability on the borrowing base, a note payable may be your best deal. Does the company own any capital assets that could be sold? If so, you could use your share of the assets to buy them out, or at least finance a portion of it.
Do you think it would be better for you to sell them your share of the business? It sounds like there are three of you and you wish to be the only one. Is that correct?
1
Thank you for the response.
Yes, you are correct, there are 3 owners, and the one most involved in the day to day running of the business, needs to buy out the 'silent' owners. so, the other 2 are only interested in cashing out. No material fixed asset. Note payable is a possibility, but wished to avoid this
Would any financial institution, have some program, to fund such situations?
Chris is right with a note or installment sale. Can the company borrow funds and purchase their stock? If so, this is a way to lever the co for the buy back.
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