Turning around a business can be an experience that is both profitable and rewarding. Many failing businesses are just poorly managed. An astute entrepreneur may be able to immediately generate a profit. Perhaps the most compelling reason for buying a business is to make use of the seller's invested capital. Most sellers ultimately finance a large part of the sale to help sell the business and to obtain a higher selling price.
Sellers are the purchaser's biggest financing source.
Typically, the seller's money is the lowest cost of funds available. Sometimes, the seller will finance the entire transaction if he or she has faith in the buyer. Many times, the seller does not need cash immediately but instead wants assured income. Most sellers will ask for all cash up front. However, they often have to give more lenient terms to make the sale.