Tuesday, June 10, 2008

Buying out a Partner with a Merchant Cash Advance

Many times, a business concept will outlive the partnership that created it.

Here’s a common scenario:
Two or more people start a business and after a few years, when it is really starting to take off, the partnership dissolves for personal reasons. One owner would like to buy out the interests of the other owners and keep the business running, but isn’t sure where to look for the money to get it done.

In a case like this one, a simple option might be to look at the business’ future credit card sales as a tangible asset to leverage. The partner wishing to buy out the others could perhaps use a Merchant Cash Advance to get the money needed to make it happen.

A Merchant Cash Advance is quicker and easier to arrange than a bank loan. The business could continue as usual while the transfer of power takes place. In fact, the ongoing success of the business is what helps the new owner to buy out his or her partners’ interests.

Would It Work Like That If I Were to Buy Into an Existing Business?
In order to qualify for a Merchant Cash Advance, you have to already OWN the business—not be in the process of buying it.
Being a partner (as in the example) indicates at least some degree of business ownership—so this makes it a little more likely that one partner could qualify for a Merchant Cash Advance to buy out the interests of another. Still no guarantee of course, but it is more likely. If you don’t own the business you simply cannot qualify for a Merchant Cash Advance. [Learn more about Who Qualifies for a Merchant Cash Advance, How a Merchant Cash Advance Works and Common Things That Could Stop a Deal.]

Is it Simple?
If the question is about getting the money to buy out a partner, then yes, a Merchant Cash Advance makes this very easy.
If the question is about the buyout process being simple, unfortunately, there is no fixed answer that would always apply here.

Every single buy out process has unique circumstances to be addressed. When both sides reach the same conclusions, a buy out procedure can be very simple. And a Merchant Cash Advance does offer a simple way to get working capital that can be used to close a deal. So if money is the only unresolved issue, yes, a Merchant Cash Advance could offer a simple solution. Many previous customers have done this very successfully.

It’s important to remember that every case is different. While a Merchant Cash Advance is certainly a flexible option to consider, it definitely won’t work in every situation. To learn if this is right for your business needs, feel free to contact AdvanceMe with any questions.

What do you think?
In considering buying-out your business partner, is money your greatest concern?