How to Buy a business on a credit card. How can you get creative when buying a small business

Hey everyone, it�s David Barnett with the investlocalbookcom blog site, author of Invest Local and Franchise Warnings

I was at a sort of business luncheon mixer the other day and somebody had made a little joke about buying a business using a credit card and it reminded me of a story a retail store for business for sale back when I owned the sunbelt office and I think the asking price was about 150 grand or something and the buyer and seller negotiated a price of 130 Now the terms of the deal were that the seller was going to receive 100 grand on closing day and the other $30,000 was going to be paid over a couple of years with interest in a vendor financing vendor take back note and you can find other videos on my channel about what vendor financing is So on closing day there was a $100,000 due and about a week before closing the buyer asked the seller what her payable situation was and that moment she had about $55,000 in payables and what he asked her to do was to stop paying her suppliers and to bring all the payables to closing day and what they did is a couple hours before the appointment where all the contracts and everything was sign the two of them sat down together She had a big stack of bills and they went through them and called all of her suppliers and he paid all of the payables using his credit card, about $55,000 worth So then when the transaction actually occurred he basically just had to pay the balance which was above 45 grand and essentially put $55,000 of business purchase on to his credit card

Because from the point of view of the seller, it was an asset transactions so she was keeping the cash in the bank, the receivables and payables She was going to have to take that money from the closing and go and pay all of here suppliers and he took care of that for her It was zero effect whatsoever on her but for him, I believe that he told me that he got enough airline points for a business class flight to California, so he was pretty excited about that Anyway, if you want to hear more interesting, fun stories about a small business transactions, financing, personal wealth, local business investing come check out the investlocalbookcom blog site all kinds of fun stuff going on there all the time

Talk to you later, bye