It is common for a buyer to purchase a business using notes based on future profits.

Question

Quizplus · Accepted Answer

It is common for buyers to use an earn-out agreement, which enables a buyer to purchase a business using future profits. An earn-out agreement is essentially a contingency plan where a buyer pays a portion of the purchase price upfront and the remaining amount is paid based on the future earnings of the business. This approach helps mitigate the risks for both the buyer and the seller.

It Is Common for a Buyer to Purchase a Business