Post a new topic
    3 Replies Latest reply on May 7, 2009 12:25 PM by loan guy

    New owner financing

    coyote Newbie
      Hi all,

      I recently sold a business for basically its assets - it lost money for the 3 years it was opened. The new owner has chosen to operate as an LLC. I've been asked to provide schedule C's (I ran store as individual) for their LLC to obtain credit. Is this a common request? I don't feel comfortable doing this. We have P&L's or any other statements that I can provide from Quickbooks instead though.

      Thoughts?

      Thank you.
        • Re: New owner financing
          dublincpa Scout

          Normally this is something the buyer should have from his/her due diligence in buying the business. The bank wants a history. You are that history or rather your records are the only history of the business.

           


          If this is part of the sale transaction or the seller still owes you money, you may have a vested interest in cooperating to ensure you get paid.

          If this is subsequent to the sale, it may be worth the karma to help him/her out at no cost to you. I would just redact personal info like social security numbers etc.

          In any event, just make sure your attorney reviews any documents you may be asked to sign by the bank. They may try to sneak in a personal guarantee or subordination agreement if there is seller financing involved. You want to be sure his/her problems stay as his/hers and don't become yours.

          Feel free to contact me with additional questions.
          • Re: New owner financing
            loan guy Wayfarer
            coyote,

             

            You sold the business already they should have requested that information before hand. It would be a nice thing to give them that information. Quickbooks should be ok.

            www.prcloans.com