Which of the following statements concerning financing the purchase of an existing business is true?
A) It is usually more difficult than securing financing for a start-up business.
B) Usually, the business seller is not a good source of financing.
C) The buyer should be able to make the payments on the loans out of the company's cash flow.
D) All of the above

Question

Quizplus · Accepted Answer

Financing the purchase of an existing business can be less risky than starting a new business as there is an established customer base and cash flow. However, it can still be challenging to secure financing, particularly if the buyer has little experience or collateral. The business seller may be willing to provide financing, but it should be approached with caution as it can lead to conflicts of interest and complications in the purchase agreement. The buyer should ensure that the payments on the loans can be made from the company's cash flow to avoid defaulting on the loan. Therefore, statement C is the only true statement.

Which of the Following Statements Concerning Financing the Purchase of an Existing