NATIONAL NOTE BUYERS exists to help and inform all who need to know about mortgage notes and trust deeds, both residential and commercial. We help individuals or companies create, sell, understand notes. We are investors and do not lend money but purchase cash flows. We are determined not only to make great deals on mortgages and trust deed notes which you are selling or buying, but strive to be a good neighbor. We shape our business decisions to improve the quality of life in the communities where we do business.

BUSINESS NOTES

If you have sold a business and took back a note for part of the purchase price, we can probably convert all or part of it to CA$H----

Privately-held business notes can often be liquidated, in full or part. Liquidation of a business note can also be set up before it is even created, in some circumstances. This is referred to as a Simultaneous Closing.

Over 80% of all businesses are sold without the participation of a bank. In these cases, the seller takes back a note requiring the buyer to pay the note over time. Often, the seller later wishes to cash out for investment or business reason. We have national buyers who will do whole or partial purchases and who will give fast quotes.

Advantages for Business Seller:

Businesses can be sold for full retail value with little, if any, price concessions.
A larger pool of potential buyers is created.
Owner-Financing can be immediately converted into cash at the same time as the property closing, virtually at the table.
The "discount" of the business note can be minimized by selecting the right buyer and note structure for resale.
Sellers now have the ability to make a deal work almost on the spot instead of waiting a period of time for the buyer to get "qualified."

Advantages for Business Buyer:

Long term financing is now available without the danger of a short fuse balloon payment coming due.
The buyer avoids paying loan points or origination fees.
Qualifying criteria is reduced
Note terms can be "custom tailored" to meet the needs of the buyer's monthly income.

Types of Businesses - Liquidation

Notes on many types of businesses can be liquidated. These are only a few of the examples. Note that a business sale usually does not include the sale of the building in which it is housed.

Restaurants and bars
Liquor stores
Convenience Stores
Florists
Medical/Professional Practices
Laundromats
Drycleaners
Printers
Auto repair shops
And Lots More

Business Note Evaluation - Factors

There are many factors that enter into the valuation of a business note. These interact with one another, in such a way that one positive can at least partially offset the negative effects of another.

Type of business
Experience of the buyer
Location
Buyer credit
Down payment/buyer equity
Seasoning of the note - months the buyer has been paying on it
Lien position
Length of term of the note - amortization period
Sales price
Interest rate
Special terms of the note
Buyer payment history

UNDERWRITING REQUIREMENTS FOR BUSINESS NOTE PURCHASES

This is an area that is very difficult to generalize, because each note is reviewed on its own merits. As stated above, some factors will tend to offset others. Shown below is an ideal note, but others can be liquidated.

Substantial Down payment ( 35%-45% minimum) A larger down payment means the purchaser has more at risk and owes less, both of which make the business note safer and therefore more saleable
Buyer must have good credit, both business and personal ( FICO score of 650+ )
Four to six months seasoning with excellent pay history
Note must be fully amortized and in first position
Note must be personally guaranteed by the buyers

NOTE EVALUATION (require information)

All of the information listed below should be submitted to obtain a solid note evaluation. It will all be required for underwriting and supplying it upfront prevents surprises later on.

Copy of the promissory note
Copy of security instrument
Copy of title
Copy of sales contract
Copy of closing statement when business was sold
Copy of bill of sale
Copy of lease agreement, if applicable
Copy of UCC-1 (Uniform Commercial Code Financing Statement)
Payment record
Social Security numbers of the buyers

Full liquidation vs. partial

Many times it may be desirable (or even advisable) that only part of a note be liquidated. Under certain circumstances, a full liquidation cannot be done. Assuming the seller does not need cash from the full value of the note, it usually will not make good financial sense to liquidate the whole note, typically requiring a larger discount. Remember that the longer the funder has to wait to recover his investment, the lower the value of the note.

Partial liquidation can be set up in many different methods. The numbers shown below are examples only. Depending on the situation for each note and the needs of the Seller, a multitude of variations could be explored.

The next 3-5 years of the payments could be liquidated. After this time period, the payments would return to the seller.
Half of each monthly payment could be liquidated. This would provide the seller with immediate cash from the liquidation of half of the payments, while still providing a monthly income from the half he retained.
The monthly payments up to the balloon date might be liquidated and the seller retains the balloon.
The balloon might be liquidated and the seller retains the monthly payments.
Nearly any combination of the above can be utilized, as long as it makes sense to the investor (purchaser of the note), the value of the note will support the proposal and the proceeds satisfy the seller's needs.

Time Required - Liquidation

Several factors can influence closing time, but in general, once the pertinent information is received by the purchaser of the note, it usually takes about 2-4 weeks.

Click here to get to the Business Note quote sheet