• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Sozo Fire

A Hot Spot of Knowledge

  • Home
  • Topics
    • Family
    • Health
    • Technology
    • Financial
    • Business
    • Marketing
    • Transportation
    • Lumber
    • Construction
  • Ask a Question
  • Contact Us

Do All-Cash Deals Exist in Trucking Business Sales?

August 8, 2012 By Sozo Staff

For many trucking business owners, an all-cash deal is the ultimate dream. What could be better than exiting the market with a large lump sum and no strings? As it turns out, 100 percent cash deals are no longer all they’re cracked up to be. While cash transactions occasionally occur in the trucking industry, they have become few and far between for a number of reasons.

Available Financing

Once the norm, cash deals began to fall out of favor when traditional lenders tightened their guidelines for business loans and SBA goodwill financing became less readily available. Unless you are selling a trucking company to a private equity group or an especially large corporation, it’s unlikely that the buyer will have enough cash on hand to cover the purchase price. Therefore, some amount of financing will be necessary to make a deal happen. When bank loans and private investments won’t cut it, many owners find that offering to carry a note helps bridge the gap between your asking price and what a buyer can afford.

Price Premium

If you’re dead-set on receiving nothing but cash for your small trucking company for sale, be prepared to accept a below-value price. Because few investors have the funds to pay for a business upfront, putting strict limits on deal structure shrinks the buyer pool by eliminating qualified candidates – some of whom might have been willing to pay above and beyond value for strategic benefits offered by your company. For those buyers who can afford to pay cash, fronting such a large amount of their own money – and taking on potentially large debts – increases risk. When buyers are forced to shoulder most of the risk associated with a deal, they will discount their price accordingly. By agreeing to finance a portion of the sale or accept contingent payments, sellers have the ability to balance risk and boost buyer confidence, allowing investors to increase their price.

Tax Penalty

As you price a trucking company for sale, it’s important to consider the actual amount you’ll receive from a transaction. When planning their post-sale life, many sellers forget to keep in mind that their transaction is taxable. Taxes will vary based on the classification of a business and structure of the sale. But in general, if a seller receives a lump sum, federal taxes – and possibly state and local taxes – will be due in large single payments as well. However, if a buyer is allowed to make payments over a designated period of time, it may possible for the seller to defer taxable gains. It’s better to keep your dollars tied up in a well-performing business than earning zero returns in Uncle Sam’s back pocket.

There are many ways to structure the sale of a truck business. But by forgoing some cash to boost buyer convenience, sellers can often boost their own outcome.

Filed Under: Transportation

Additional Articles

Selling a Business: How to Package Your Business for Sale
Is Your Business Ready to Grow?


Primary Sidebar

Jackrabbit Class Software
Lyon Financial

Popular Posts

  • Berg Furniture Children’s Furniture Lines: Options and Space Savings, Galore
  • Dream Furniture for Your Child, Part 2
  • Tropical Decking and Ipe Alternatives
  • Dream Furniture for Your Child, Part 1
  • Benefits of Going on a Mission Trip
  • Why Walnut Gets Special Treatment, Part 2
  • Business Flash Drives
  • Custom Wire Oven Racks by Three M Tool for Bakeries
Jackrabbit Dance Software

Recent Posts

  • Key Differences Between Pool Safety Covers & Winter Pool Covers, Part 3
  • Key Differences Between Pool Safety Covers & Winter Pool Covers, Part 2
  • Key Differences Between Pool Safety Covers & Winter Pool Covers, Part 1
  • Control All Your X10 Units With Your Smart Device with X10’s WiFi Unit
  • What to Look for in an Industrial Concrete Flooring Contractor
  • Revolutionize Your Home Automation & Security Systems With the X10 WiFi Unit, Part 2
  • Revolutionize Your Home Automation & Security Systems With the X10 WiFi Unit, Part 1
  • Teach Your Daycare Kids to Care About Sharing
  • The X10 Linked 720p HD Pan and Tilt WiFi Camera can Give You a Bird’s Eye View – Part 2
  • The X10 Linked 720p HD Pan and Tilt WiFi Camera can Give You a Bird’s Eye View – Part 1
X10 Home Automation

Recent Comments

  • Sozo on X10 GSM Home Security Systems
  • Michael Cobb on X10 GSM Home Security Systems
  • Rachel Lannister on What You Need To Know About Kiln-Dried Lumber, Part 2
  • Rachel Lannister on What You Need To Know About Kiln-Dried Lumber, Part 1

Copyright © 2021 Sozo Firm Inc · Privacy Policy · Disclaimer · Sitemap