When most people think about lenders of money, they think about banks and not themselves. In fact, there are many situations where ordinary people lend money. In this report, I am going to discuss how a business owner that is selling the business becomes a money lender. This occurs when the owner has agreed to accept payment of the purchase price over time, thereby essentially lending the purchaser the money to buy the business.
In any situation where a business owner agrees to accept payment of the purchase price at a later date, that is, assume the role of lender, it is essential that the business owner takes sufficient security from the purchaser to ensure payment of the purchase price.
The promise to pay is typically evidenced by a promissory note. However, this is not enough.