Business Resources

Entries in asset based (2)

Wednesday
07Oct2009

Is the US Small Business Administration Limiting Goodwill?

From The Small Business Channel: Limit on goodwill by SBA slowing small business acquisitions

Small business owners attempting to sell their businesses, along with business brokers are frustrated over the rules of the SBA concerning good will, which has stopped a lot of business deals from being completed because of the inability to get the financing to close the deals.

Starting in March the SBA capped the top loan amount for good will at $250,000, which has been the main detriment in owners being able to sell their small businesses, and prospective buyers to acquire them.

For those who may not know, good will refers to the intangible assets of a business, which could include things like its reputation, patents, trademarks, and other non-physical items that make a business what it is, aside from the usual things like buildings and equipment, among other tangible items we think of in relationship to a business.

Read the full article here.

Monday
08Dec2008

Four Models of Business Valuation

Throughout the business valuation process, you will need to bear in mind the ‘components’ your business has: the assets it owns, the goodwill it has with customers and suppliers, and the expertise of its employees.

The asset-based approach is the most conservative of all valuation models. It is appropriate for businesses such as property companies or manufacturers, where assets form a large percentage of the ‘worth’ of the business (in the former case, buildings or development sites; in the latter case, expensive tools or machines). This method gives you a rough idea of the minimum price you can expect to negotiate – a financial comfort blanket.

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