**Guide to buying a business in debt - Full Article here -http://bit.ly/distressedbusiness-guide** - Why buy a business in debt? - Where to find businesses that are in debt and looking for a way out? - How to turn the business around Do you want to know more? Go to https://business-sale.com to discover all you need to know about buying & selling a business. LinkedIn: https://www.linkedin.com/company/9449022 Facebook: https://www.facebook.com/CompaniesForSale Twitter: https://twitter.com/businessforsale

1. Buying a
business in debt
Distressed Businesses

2. Distressed Businesses
• Business decisions carry an element of risk – how can
we turn that into a positive business opportunity?
• Planning, research and expansion opportunities can
lead to prosperity and financial growth.
• Understanding the strategic risk is the first step
towards a successful purchase.

3. Distressed Businesses
• What you need to know:
The financials: current or
projected revenue allows for the
coverage of operational costs and
interest payments on financing.

4. Distressed Businesses
• Does the company have capacity to
generate enough revenue to cover vital
operational expenses?
• The majority of UK SMEs generally have
over £50,000 outstanding debt, however
large chunks are routinely written off.

5. Distressed Businesses
• Be clear on what the exact amount of
debt is. It is the responsibility of the
purchaser to enquire.
• How does this process work in terms of
acquisition and debt transition?

6. Distressed Businesses
• The seller may set a higher
asking price in order to settle
debts and avoid transition.
• Alternatively, he may sell the
company at a lower price and
transfer the debt under new
ownership.

7. Distressed Businesses
Choosing the lower sale price has its own
pro’s and con’s:
• With a lower sale price you can invest
into the company’s profitability and
settle the debt.
• Some sellers choose to “split the
difference’’.
• Other options include loans and third
party lenders.

8. What happens with a third party
involved?
• If a company owes money on a loan,
the lender can sell the debt to a third
party. The new proprietor secures the
right to collect that money and even
profit off the interest.
• If the buyer purchases the loan, they’ll
be able to retain complete control of
it.
Distressed Businesses

9. Distressed Businesses
• Growth and risk often go hand-in-hand.
• The key is the ability to take calculated
risks.
• Have a clear idea of the company’s
corporate life-cycle during the valuation
process to calculate all the financial
outcomes.

10. Buy a distressed business today!
 https://www.business-sale.com/
 Growth and expansion
opportunities
 Financial prospects