FAQs

 As in all industries, an expert with experience can save you a lot of time and money. A business broker is able to assist you with the various parts of a transaction. On the seller’s side, a business broker can work with you in creating the right presentation for your respective buyers along with assisting you in protecting you with key parts of your transaction to include a fully executed non-disclosure agreement or a properly documented set of transaction documents. On the buyer’s side, a business broker can work with you in creating the right strategy when engaging potential businesses to include knowing the right questions to ask and understanding the landscape of the industry in which you would like to enter.  

 Healthcare Biz Brokers is a specialty boutique brokerage catering solely to the medical sector of the business market. The reason for this detour from the generalist brokerage role is to help our clients and customers understand the unique and specific intricacies of the healthcare world. Healthcare as a business model comes in many varying forms and shapes and it is imperative that you choose a brokerage that understands the unique needs of the specific industry. 

 The costs involved will vary by client, by customer and by the task(s) requested. In the industry, the seller of the business will incur the primary cost for the broker’s fees, which as a whole will be 10% of the sale price. In the event that the buyer procures our services, we will negotiate a fee based on either an hourly rate or a flat rate as determined by what tasks are requested. Other fees incurred by either party include escrow fees, licensing fees, vendor related fees, publishing fees, search fees to name a few. 

 Yes. As a broker, our brokerage will always recommend an escrow company and an escrow officer who has experience with bulk sales. The notion that an escrow services are primarily for the buyer are not true. In our experience, escrow services provide a mechanism to safeguard against any unknown issues which may arise such as liens and judgements. Escrow also affords a layer of protection through their escrow instructions and advisories. Furthermore, an escrow will handle all monies and coordinate the payment of liens or monies owed to third parties by the seller. 

 It is very difficult to state a specific time in which your listing will sell. The fact is that our brokerage has sold listings in a few days while other listings has stayed on the market a few months. The key to a successful and efficient sale is to ensure that your listing is prepared to enter into the marketplace. When you have your paperwork in place and you exude a level of transparency and competency in your listing, your buyers will know or feel that this may be a good fit for them. 

Typically, we see thirty (30) day escrow timeframes in which a due diligence is executed and transaction documents are drafted and signed. The timeframes are not as crucial when compared to the residential market though if one party is not performing, the broker may issue a notice to perform. There are some extreme cases where a longer time is required which may include a corporate buyer who necessitate a more intense due diligence or a buyer who is acquiring a business through SBA financing. 

We advocate putting together a paper heavy transaction where EVERYTHING is written, reviewed and signed by all of the parties involved. We use the analogy of the purchase of a home when we work with our sellers and buyers. The transaction should include a carefully planned due diligence process with a number of well-planned face-to-face meetings to discuss all findings of the ongoing due diligence as well as a broker driven set of transaction documents which disclose all material facts and agreements. 

A seller-carry is basically a negotiating term where the seller agrees to provide seller financing for the purchase of the business. The form of a seller-carry will vary depending on the circumstances and preferences of both parties. For example, the deposit amount, the number of months in which to pay, the interest on the balance due, the penalty for not paying, the use of a balloon payment, and so forth. Normally, the buyer will pledge both the business stock and a form of real property collateral via a promissory note which should be drafted by a licensed attorney. 

 When it comes to the FFE, this will be determined by the seller. Normally, if the business is in operation and it has staff in place and patients on its service, there will be FFE in place. We ask our sellers to create an itemization of the FFE and to include what FFE will be excluded from the sale. We also ask our seller to affix a value on the respective FFE which will be helpful for our buyers when they talk with their accountants. For smaller and newer businesses, we often find that there is a limited and at times no FFE in place with our buyers simply purchasing a set of licenses and a corporation or company. 

 For leases, this becomes a topic where a meeting of the minds needs to occur as well as an understanding of what lease terms are in place. The seller needs to disclose their lease terms and a copy of the executed lease agreement as part of the initial due diligence. This allows the buyer an opportunity to understand the existing lease to include any language allowing or prohibiting subleasing or any penalties related to an early termination by the existing seller. Our experience has also shown that a flexible landlord or property manager can make or break a deal. If the landlord understands the fact that the seller is selling their business and that they (the landlord) may need to make certain concessions to allow the transfer of tenancy, this will be ideal. A few side notes would include ensuring that the buyer will qualify for a new lease and also to initiate the lease discussions with the landlord as soon as an escrow is opened. We highly recommend not waiting until the transaction is about to close to start these lease related conversations. 

The receivables and the payables are a point of negotiation between the seller and the buyer. The typical scenario includes using the close of escrow date as the demarcation where the buyer assumes all receivables and payables the day after. The key to receivables and payables is communication. Depending on the scale of the operations, we may ask for each party’s respective bookkeeper, accountant and biller to coordinate on how to best orchestrate the exchange receivables and the payables. 

As a rule, the buyer does not buy the seller’s debt, but there are circumstances where the buyer may want to take on the seller’s existing debt. One such situation would include where the buyer is using the seller’s debt as a means to negotiate the sale price of the business. But there are certain debt categories that are usually not allowed and these include PPP loans, SBA loans, liens and judgements.