By Brad MacLiver
Authorship and profile at Google
When a SD pharmacy acquisition has been accomplished by using the private financing method of a pharmacy business note, the holder of the pharmacy note has the option of selling the pharmacy business note for a lump sum of cash instead of waiting for the monthly payments and taking the risk those payments will always be made. Pharmacy business notes can be sold by using a discounting method. Instead of buying a pharmacy note at its face value, theSouth Dakota
Most pharmacy business note sellers only look at the discount rate and quickly calculate in their head that they are giving up too much money to make the selling of theSouth Dakota
1. What is the motivation for selling the SD pharmacy note? What are the desired goals? Is lessening the exposure to risk something to consider? Are there any financial reasons to pay off debt? Do you need capital for a new venture? Do you have any dreams of exotic vacations or world travel that could only be accomplished with a lump sum of cash? How important is it to accomplish these goals? What are the opportunity costs if you don’t have the lump sum of cash to achieve your goals, or invest in something that pays a higher return? Determine investment and family priorities.
2. What is the Current Fair Market Value of the pharmacy business? This is what someone is actually willing to pay for the business instead of a simply “earnings times x” formula. The real aspects of what is happening in theSouth Dakota
3. How much cash is immediately required by the holder of the pharmacy note in SD?
4. A pharmacy note inSouth Dakota
5. Are you willing to sell only a portion of the Note (this is called a “Partial Sell”)? The discount rate can be a more attractive proposition when only a portion of the note is sold and the SD Pharmacy Note Investor is not holding all the risk.
Understanding the Risk for the Note Buyer:
1. SD Pharmacy Buyer Competency - There is the risk that the pharmacy buyer may not run the business as efficiently as you have, sales drop, and the pharmacy business buyer cannot meet the payment obligations. Incompetency could lead to late payments, missed payments, or bankruptcy.
2. SD Pharmacy Industry Changes - Changes caused by influences either within the industry, or regulations governing the industry, can make it increasingly difficult for the pharmacy business buyer to meet the contractual financial obligations.
3. Future Competition - Sales and income of the store may be affected by yet unforeseen pharmacy competition either building in the neighborhood or through mail order.
4. Loan to Value - When originating aSouth Dakota
5. Title Insurance – Pharmacy business notes don’t have title insurance that will make good a loss arising through defects of titles, or liens.
6. Time Value of Money - Where a dollar received today is more valuable than a dollar received in the future.
7. Opportunity Costs - When the selection of holding theSouth Dakota
It is beneficial to discuss the options and potential origination of a pharmacy note with Pharmacy Business Note Investor before the Purchase and Sale Agreement is finalized for the acquisition of the pharmacy. This provides the SD pharmacy business seller, and future note seller, valuable insight into structuring the pharmacy business note so it can be successfully purchased.
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Authorship and profile at Google
When a SD pharmacy acquisition has been accomplished by using the private financing method of a pharmacy business note, the holder of the pharmacy note has the option of selling the pharmacy business note for a lump sum of cash instead of waiting for the monthly payments and taking the risk those payments will always be made. Pharmacy business notes can be sold by using a discounting method. Instead of buying a pharmacy note at its face value, the
Most pharmacy business note sellers only look at the discount rate and quickly calculate in their head that they are giving up too much money to make the selling of the
1. What is the motivation for selling the SD pharmacy note? What are the desired goals? Is lessening the exposure to risk something to consider? Are there any financial reasons to pay off debt? Do you need capital for a new venture? Do you have any dreams of exotic vacations or world travel that could only be accomplished with a lump sum of cash? How important is it to accomplish these goals? What are the opportunity costs if you don’t have the lump sum of cash to achieve your goals, or invest in something that pays a higher return? Determine investment and family priorities.
2. What is the Current Fair Market Value of the pharmacy business? This is what someone is actually willing to pay for the business instead of a simply “earnings times x” formula. The real aspects of what is happening in the
3. How much cash is immediately required by the holder of the pharmacy note in SD?
4. A pharmacy note in
5. Are you willing to sell only a portion of the Note (this is called a “Partial Sell”)? The discount rate can be a more attractive proposition when only a portion of the note is sold and the SD Pharmacy Note Investor is not holding all the risk.
Understanding the Risk for the Note Buyer:
1. SD Pharmacy Buyer Competency - There is the risk that the pharmacy buyer may not run the business as efficiently as you have, sales drop, and the pharmacy business buyer cannot meet the payment obligations. Incompetency could lead to late payments, missed payments, or bankruptcy.
2. SD Pharmacy Industry Changes - Changes caused by influences either within the industry, or regulations governing the industry, can make it increasingly difficult for the pharmacy business buyer to meet the contractual financial obligations.
3. Future Competition - Sales and income of the store may be affected by yet unforeseen pharmacy competition either building in the neighborhood or through mail order.
4. Loan to Value - When originating a
5. Title Insurance – Pharmacy business notes don’t have title insurance that will make good a loss arising through defects of titles, or liens.
6. Time Value of Money - Where a dollar received today is more valuable than a dollar received in the future.
7. Opportunity Costs - When the selection of holding the
It is beneficial to discuss the options and potential origination of a pharmacy note with Pharmacy Business Note Investor before the Purchase and Sale Agreement is finalized for the acquisition of the pharmacy. This provides the SD pharmacy business seller, and future note seller, valuable insight into structuring the pharmacy business note so it can be successfully purchased.
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