Re: Business Notes?! Or Accounts Receivables?! - Posted by David Butler
Posted by David Butler on May 11, 2007 at 13:40:18:
Business notes are notes that are created when the owner of a business SELLS that business to a new owner, and agrees to carryback all or part of the financing for the new owner-buyer. These notes are secured by the assets of the business being sold to the buyer-Payor, and possible other assets as well.
It sounds here like you may be talking about income derived from invoices, or other forms of account receivables contracts of some sort. There is not a “way to set it up to attract investors concerning interest rate, yield, etc”. What you have is what you have, as you are selling or financing existing contracts. If selling, it falls under the niche of “factoring” in most cases. When factoring, the buyer will tell you what they are willing to purchase, and what they will pay for it, based on the account histories and documentation that you provide them with.
If using as collateral to finance a new loan, it is generally considered to be ABL (asset based lending), and the lender will again be dictating what they will charge in terms of rate, yield etc, based on the strength of the loan request, and assets being used for collateral.
Personal guarantees are important in business notes, factoring, and ABL financing - and are valued according to how the investor rates YOU, and the strength of your guarantee.
To find potential investors for these accounts, simply enter a search engine such as google, yahoo, or others, and enter terms such as “factors”, “factoring”, “asset-based lenders”, and similar. This should pull up a number of companies and/or experienced consultants who can assist you in pursuing the possibility of converting these income streams to lump sum cash now.
Happy Hunting, and best wishes for your success!
David P. Butler