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Buy Y our Own Business

Lien Search and Filings

These documents provide proof that all assets the seller is delivering to you
are free and clear. If the seller is holding a note on the sale, they may then fi le
new liens against the assets as security to your loan.

Purchase Price Allocation

Have your accountant put the proposed purchase price allocation document
together and negotiate directly with the seller’s accountant. There are tax
consequences for both buyer and seller that conflict with one another.

Transfer Taxes—Bulk Sales Taxes

You may be obligated to pay certain taxes and fees on the assets you acquire.
On vehicles, or “rolling stock,” there can be title fees, licenses, and taxes based
on current value. Check with your attorney and accountant. These taxes vary
from state to state.
I was involved in the sale of a large moving business, where the lender’s
attorney “forgot” to include these costs on the closing statement. The day of
closing—in fact, 90 minutes before—he nonchalantly advised the buyer that
he would have to come up with $810,000 more cash at closing. I told the bank
they had to loan the buyer the additional money with very favorable terms, or
lose the deal and be liable for the costs incurred by the buyer to rescind the
offer, plus pain and suffering. Within three minutes, the bank’s senior vice
president was on the phone negotiating. You don’t get this type of response in
all deals, but a multimillion dollar deal was at stake. The lesson here is this:

know the financial and contractual obligations involved before closing.

Your Next Step: Take the Ball and Run with It

Completing the information in this chapter is a lot like being the rookie
quarterback who’s just joined the pros. You arrive in the big leagues and
everything—the uniform, the players, the fans, the coaches, and the entire
playbook—is new. You spend each and every day learning new plays, watch-
ing videos, working with the coaches, studying the opposition, and practicing
for hours. Then, it’s showtime.! Are you nervous? Of course. Are you ready?
Absolutely.! It takes a few plays to get over the jitters, but each day gets easier
because you’ve prepared yourself and followed the right steps.

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