Our seller should insist upon a critical illness policy on the buyer with sufficient benefits to cover the payments on the loan they’ve providing.Ī judicious buyer will want more than this as the seller is not their only obligation. Credit checks, Personal Property Security Act (PPSA) searches and criminal history checks through the Canadian Police Information Centre (CPIC) are, of course, essential. Verifying the skills, competence, integrity and reliability of the purchaser is important. This can include checking references – former employers, employees, clients, suppliers, bankers and so on. A seller that is financing the buyer would be prudent to apply the same diligence as any financial institution lending money. Let’s backtrack slightly to mention another precaution. An experienced broker can find the most cost-effective plan to meet the needs and obligations of the buyer AND protect you, the seller. If you’re the seller, meet with a wealth planner who is a licensed insurance broker insist as a condition of sale that the buyer put in place adequate protection for the loan you’re making to them. But what if the buyer or the seller were to get ill or die? Insurance can mitigate the risks for both.
Most also involve a training program to equip the new owner to operate the business successfully and ensure a smooth transition. The majority of our transactions involve the seller financing a significant portion of the purchase price. Adequate protection through insurance is high on our checklist. There are many actions available to reduce the risks when embarking on the buying or selling of a business. You wouldn’t head out on a family road trip without checking your car and local weather forecast would you? Insurance can help mitigate risks when buying or selling a business
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