Cash

We got several options to offer seller when we purchase a business to complete the transaction, we might consider extracting cash from the business as part of the transaction. Here are some possible ways that cash can be extracted from a business at purchase:

1. Dividend: We can declare a dividend from the profits of the business prior to the sale, which can be paid to the seller as a cash payment at closing.

2. Cash on Balance Sheet: We can negotiate to retain a portion of the cash on the balance sheet of the business, which can be used to pay the seller at closing.

3. Working Capital Adjustment: The buyer and the seller can agree on a working capital adjustment, which can be used to adjust the purchase price based on the actual level of working capital in the business at closing. This adjustment can include cash balances.

4. Seller Note: We can issue a promissory note to the seller as part of the purchase price, which can be paid over time with interest. The seller note can include a cash payment at closing.

5. Earn-Out: The buyer and the seller can agree to an earn-out structure, where a portion of the purchase price is contingent on the future performance of the business. The earn-out payment can include a cash payment at closing.

6. Debt Assumption: The buyer can assume the existing debt of the business, which can free up cash for the seller. The amount of cash available will depend on the amount of debt being assumed.

It's important for us to carefully consider the implications of extracting cash from the business at purchase, as it can impact the financial health and future growth of the business we buy. We can work together to negotiate a structure that is fair and reasonable for both parties. The structure would be reviewed by our legal and financial professionals to ensure that the transaction is structured appropriately and meets all legal and regulatory requirements.