We are seller financing out small business. When the buyer behind making payments to us, would it be best for them to make it out to our company name (buyer purchased assets and customer base only), or to us personally. Looking for the best tax advantage.
The answer here really depends on your sales contract. Typically, most people who offer seller financing have their borrowers submit their payments directly to the business, because the business that sold those assets is the legal entity that has a right to enforce that contract. The major complaint to this strategy is that you must keep your legal entity going even after you’ve sold all the assets. However, this is done all the time.
You don’t want to have a borrower that is behind in payments change who they are making payments to. This could not only mess up borrow in the future, but it could also mess up your contract and make it more difficult to get paid in the future. You could also be violating your contract if you try to do something like this. You’ll need to read through your financing agreement and fully understand what it says before you can know what to do though.
You must be logged in to reply to this topic.
Not signed in?
Sign in to participate on our website!
315 Madison Avenue, 24th Floor
New York, NY 10017
Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.
Product or company names, logos, and trademarks referred to on this site belong to their respective owners.