Just wondering, and it’s a crazy thought on my part, but it is late on a Saturday night so sometimes that is when I have crazy thoughts. Wouldn’t it be best to ask the bank, yeah I know what a ridiculous thought.
When selling a business that a buyer can’t raise the money for. Is it possible to
-raise debt level in business
-take leveraged cash out of business as purchase price
-transfer the business over to buyer
-new owner then pays off the debt
Does this model work from a banks perspective?
Interesting question, although IMO this sounds rather unethical – and being todays times, maybe a bank may not see this as a favourable proposition to increase debt so a potential purchaser can buy the business with the banks money – albeit they couldnt do this on their own merit.
Furthermore, raising the businesses debt would potentially require asses as well.. Who’s assets will be used..
However, taking this to a more fundamental basis with a question not asked and one that should, is that why cant the potential buyer raise the funds? and if they cant, is it a sale one would want to pursue?