New Jersey Business Brokers: Article About Business Brokerage Terms
Most business owners are unfamiliar with the world of business mergers and acquisitions. When it comes time to sell your business, you will be on the fast track if you already understand some of the language of the industry. Speak one-on-one with your New Jersey business brokers using your newly acquired vocabulary.
Adjusted earnings are the stated earnings of your business after your accountant has made adjustments for unusual expenses and owner's compensation. Your accountant may also deduct certain discretionary expenses and other non-essential expenditures to arrive at an adjusted earnings calculation.
An agency disclosure is a written explanation of the broker's responsibilities in your business transaction. It clarifies which party the broker represents, whether buyer, seller or both as a dual agent.
A conditional sales contract is a binding agreement that the owner will hold title to the business until the purchaser has complied with specific conditions. This document is also known as an installment contract.
Consideration is a tangible or intangible item of value that the seller and purchaser exchange under the terms of a contract. It can be cash, goods, services or promises.
An exclusive right to sell is an agreement between you and your broker that you will pay the agreed-upon commission when your business sells. This applies even if you or another broker brings the buyer to the table.
A finder's fee is a commission a broker may earn by arranging the financing that enables a client to purchase a business.
The business brokers from Selby Associates of New Jersey would be happy to answer any question you have about business mergers or corporate exit planning.
It may also be a fee the broker receives for locating a property for a client to purchase.
Goodwill is an intangible that adds to the total value of you business. It includes name recognition, reputation, the loyalty of your clientele and the trust your customers place in your product brand.
A letter of intent precedes a formal purchase offer. It details the general terms and conditions of a proposed transaction. It mentions purchase price, a projected time frame for due diligence, exclusivity and conditions for closing. Receiving this written document lets you know the buyer is serious.
A Certified Lender Program, or CLP, is offered by business mortgage brokers who are experienced in working with the Small Business Administration (SBA) in providing financing. CLP is an accelerated approval process that guarantees a decision in three days from SBA.
A Preferred Lender Program (PLP) enables entitled lenders to approve an application for financing with no additional SBA approval. A PLP-certified finance firm has a verified track record that ensures it adherence to SBA standards in issuing approved loans.
A warranty is an assurance, either expressed or stipulated, that an item or circumstance involved in your business sale is verifiable. This gives the purchaser added security in the transaction.