Click here to read the full article by Eric J. Gall.

Published on the Business Brokers of Florida website on December 14, 2023.


Main street business owners are often taken by surprise when a buyer demands working capital to be included in the sale price of a business. Working capital is typically included in the price of lower-middle-market transactions.  Main street business transactions seldom include working capital in the price.  However, due to economic uncertainty, more lower-middle-market buyers are reaching down to purchase main street businesses and expecting working capital to be included in the sale price of a business.

Here are seven reasons why a buyer may expect working capital to be included: 

1. Ensures Business Continuity

2. Creates Seamless Transition

3. Avoids Additional Investments

4. Mitigates Risk

5. Simplifies Negotiations

6. Avoids Disputes

7. Simplifies Handling of A/R and A/P

If you have any questions about working capital or deal structure in general, please do not hesitate to reach out.

Regards,
Eric J. Gall
239.738.6227
[email protected]