• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Strategicia

Initiate. Inspire. Innovate.

  • Home
  • Topics
    • Family
    • Health & Fitness
    • Education
    • Furniture
    • Technology
    • Business
    • Financial
    • Marketing
    • Transportation
    • Construction
  • Ask a Question
  • Contact Us

Can You Still Sell Your Transportation Business for Cash?

Last updated on September 25, 2012 by Sozo Staff Leave a Comment

Maybe—but you probably won’t really want to. Even though an all-cash business sale is the ultimate dream for many business owners, such a dream is unlikely to come true. In fact, it might not even be the best case scenario, anymore. A large lump sum, with no strings attached, may become about as likely as winning your state lottery’s jackpot: You can dream about it, but you’ll probably be disappointed, if you do. Why has a cash deal become so unlikely? Three main reasons come to mind: necessary financing, decreased pricing, and higher taxation.

Necessary Financing

Few independent buyers have enough cash to cover the purchase price. Traditional lenders have increasingly stringent guidelines for businesses seeking loans. SBA goodwill financing is becoming less common. What does that leave? Seller financing. While transportation business owners understandably prefer to walk away from the sale with cash in hand, it’s increasingly more likely that they’ll be carrying a note instead, for at least part of the agreed-upon purchase price. Sure, large corporations or private equity groups may prove exceptions to this rule, but the majority of buyers aren’t in such a position. If you’re selling to an independent agent, you should brace yourself and be ready to be asked about seller financing.

Decreased Pricing

If you decide to require cash for the sale of your transportation business, you need to be prepared to offer discounted pricing. Not only will you eliminate many prospective buyers, but you’ll also decrease the chances of a deal that comes close to your asking price and the amount your business is truly worth. Even for buyers able to pay cash, putting out such a large sum at once means an increased risk on their part. The same issue can come up when bank financing is available: Taking on major debt carries great risk. When the seller is unwilling to take on any risk, it leaves the buyer wondering if your business is worth the risk; by contrast, when the seller is willing to provide partial financing, the buyer’s confidence may well be bolstered as a result. That bolstered confidence can mean more money for you in the long run; you just have to be patient.

Higher Taxation

Just like almost any lump-sum earnings or winnings, the amount you receive from your transportation business sale is taxable. The tax amounts are highly dependent on the structure of your sale, but a large lump sum usually means a large single payment from you to good old Uncle Sam. When they buyer makes payments over a period of time instead of paying a lump sum, you may be able to defer taxable gains, allowing you to earn interest on the full sale amount.

When you consider these and other issues that can complicate a cash sale of your transportation business, The Tenney Group advises against such a narrow perspective. In the long run, providing some financing can mean more benefits for you.

Filed Under: Business, Transportation

Additional Articles

Portrait of an Ideal Seller by the Expert Transportation Brokers
daycare childcare
Keeping Child Care Center Staff Members Happy, Part 2
daycare childcare
Keeping Child Care Center Staff Members Happy, Part 1
daycare childcare
Tips for Child Care Centers: Hiring Quality Staff Members
martial arts class with instructor
Reasons Why Complaining About Work On Social Media Is A Bad Idea
girls exercising in gym
How To Include Children with Special Needs at Your Gymnastics Center, Part 2

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

sixteen − seven =



Primary Sidebar

Lyon Financial

Popular Articles

  • Effects of Television on Teenagers
  • Genuine Mahogany vs. African Mahogany: What's the Difference?
  • What Is So Great about Teak Wood?
  • Modern Perforating Techniques Used by Metal Manufacturers & Fabricators
  • Is Your Teen Diagnosed with Reactive Attachment Disorder?
  • Ipe Decking: Should you use Face Screwed or Hidden Fasteners?
  • Top 3 Pool Maintenance Tasks – and Suggestions on How To Do Them
  • The Gymnast’s Diet: Why You Should Avoid Nitrates & Nitrites
  • The Gymnast’s Diet: Why You Should Avoid Refined Flours and Sugars
Lyon Financial

Freshest Articles

  • Salt Water Swimming Pool Maintenance, Part 2
  • Salt Water Swimming Pool Maintenance, Part 1
  • Lovin That Outdoor Pizza Oven!
  • When Should I Pump My Septic Tank?
  • When Buying Larger Size Lumber Is Actually Cheaper, Part 3
  • When Buying Larger Size Lumber Is Actually Cheaper, Part 2
  • When Buying Larger Size Lumber Is Actually Cheaper, Part 1
  • Pool Safety Tips: Keeping Kids Safe, Part 5
  • Pool Safety Tips: Keeping Kids Safe, Part 4
  • Pool Safety Tips: Keeping Kids Safe, Part 3
Lyon Financial

Reader Feedback

  • Mitch Shearer on How the All-New X10 HUB Builds on Already-Amazing Technology
  • Alec Burns on Health Benefits of Having Your Own Backyard Swimming Pool
  • Welded Mesh on Modern Perforating Techniques Used by Metal Manufacturers & Fabricators
  • Tyler Johnson on Top 3 Pool Maintenance Tasks – and Suggestions on How To Do Them
  • Kate Hansen on Health Benefits of Having Your Own Backyard Swimming Pool
  • Shaylee Packer on Modern Perforating Techniques Used by Metal Manufacturers & Fabricators
X10 Home Automation

Copyright © 2023 Sozo Firm Inc · Privacy Policy · Disclaimer · Sitemap