Sell Your Hotel Faster, and For More Money, by Providing Seller Financing

By Mike Handelsman Group General Manager, BizBuySell.com | June 06, 2009

There's nothing more frustrating than a listed business that attracts a lot of attention, but no buyers who are willing to seal the deal. Unfortunately, that's exactly the situation many hotel owners are facing in today's marketplace.

Most of the time, the hotel isn't the problem. In fact, a business that generates significant attention in the marketplace is usually a good candidate for a sale. Instead, the issue is most often the buyers' inability to secure financing at the owner's asking price. That leaves owners with two options: Either lower the asking price or work with the buyer to overcome sale barriers.

A seller's willingness to finance at least part of a business sale has always been a strong selling point for buyers, but in recent months it has become essential. With many potential business buyers unable to access the necessary funds from lending institutions, hotel sellers who decide to offer seller financing are likely to have much more success selling their business than those who do not.

While it sounds like a no-brainer for hotel sellers to offer financing, they should be careful not to do so unprepared. When making the decision to offer financing, there is a great deal to consider and research in order to help ensure a successful, smooth process. To stay on track, sellers need to follow some obvious - and some not so obvious - dos and don'ts.

Can seller financing be risky? Absolutely, but under the right circumstances it can also be a financial boon. If financing the sale of your hotel sounds like a good idea, don't make another move until you've carefully considered the lessons being learned by other seller-financers.

Evaluate the Risk

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