Did you use a Seller Note Standby Period?

by an member from University of Washington

3 months ago

Hello again,

I'm helping out a self-funded search fund and I want to get a guage on how common standby periods are in seller notes. Did you use one in your deal and was it difficult to obtain?

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searcher from University of California, Berkeley - Haas School of Business

I would say it's not uncommon. On the other side, it's important to know whether and how long you need the period. Build the financial model and check whether no standby may causing negative cashflow, especially when you're also taking other debt. If that's the case you have to request the standby to make the operation sustainable.

2 months ago | like reply | 0 likes

lender from University of Missouri - Columbia

Very common to use as a portion of equity. 2 years minimum for SBA as mentioned above

2 months ago | like reply | 0 likes

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