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Why You Should Sell Your Business Through An Installment Sale

Finance & Money Blog

If you are preparing to sell your business, you probably want to make sure that you are fully prepared and that you handle the entire situation the right way. One option that you might not have considered is the option to sell your business through an installment sale. Basically, with an installment sale, you will receive multiple payments over several years instead of one single payment for your business. This can be a good option when selling a business of any kind for the reasons below and more.

Reduce Your Taxes

One major concern that you might have is about the amount that you will have to pay in taxes. It is true that many people have to pay a lot of money in taxes when selling their businesses, and this can take a big chunk out of your profits. With an installment sale, though, you can reduce the amount that you are bringing in at one time, which could help you pay less in taxes. Just make sure that you talk to a financial professional to ensure that you set everything up properly and that you still handle the taxes that you are required to pay.

Open Your Business Up to More Potential Buyers

Of course, if you want to sell your business as soon as possible, then you probably want to open up the sale to as many people as possible. There are investors out there who might not be able to pay out the full amount at one time but who might be able to purchase your business with an installment sale contract. By offering your business through an installment sale, you can give even more people or businesses the opportunity to purchase your company. Not only could this be beneficial for potential buyers, but it could be beneficial for you, too. After all, it will make business ownership easier for others, and it could help you find a potential buyer a lot more quickly.

Of course, there are some downsides to selling your business through an installment sale, such as the fact that you will not get all of your money right away. This could impact your own future business decisions and investments, at least for the next few years. However, overall, selling your business through an installment sale could be a good decision. Just make sure that you work with the right financial advisors and legal professionals so that you can set up and execute the sale the right way.

When selling a business, how to minimize tax may be something that's on your mind. Contact a financial advisor to learn about how to do this.


11 February 2020