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Buyers' Costs When Buying a Business

 

 

There are different costs that buyers should consider when purchasing a business, which include:

Purchase Price of the business – can be paid for using buyer’s cash, bank loan (i.e. SBA) or seller financing

Purchase Price of the inventory (if not included with the sale of the business)

Escrow Fees – Buyers and Sellers typically split the costs of escrow 50/50.

Sales Tax on Furniture, Fixtures, and Equipment –Buyer is responsible to pay sales tax on the furniture, fixtures and equipment that are included with the business. The sales tax is based on the city that the business is located in.

Franchise Transfer Fee (if applicable). Typically, when you buy an existing franchise location, the buyer is responsible for paying the franchise transfer fee to the Franchisor.

Security Deposit related to Lease of Property where Business is Located. Typically, this can equal 1 or 2 months of rent.

Working Capital

Construction Costs (if applicable)

Advisor Fees (if applicable)