Most businesses sell for one-third to one-half cash down. The remainder is financed by the seller, by a bank or through other resources. Sellers generally prefer to receive all cash at closing and some buyers are able and willing to accommodate them. However, buyers are usually trying to get the most bang for their buck and will want to leverage their down payment into the largest business they can buy. Although buyers may want to make a no-money or low-money down offer, it is very rare that they will succeed. Usually a business cannot earn enough to both pay a salary to the owner and service such a high level of debt. In addition, the lender, whether it is the seller or a bank, wants the buyer to show his commitment to the business by having a vested financial interest in its success.
