Wednesday, January 12, 2022

When is 90% Bank financing ok when buying a business? And does David HATE LEVERAGE?


Shalina asks about high bank debt leverage. Does it matter? Does David hate leverage?

Shalina was asking a follow up question from what she saw in my video ‘questions about seller financing.’

It’s a great question because it leaves you wondering if you really can/should buy a business with only 10% of your own money.

I’m not against high leverage if the business has demonstrated cash flows and can service the debt.

WHERE you borrow the money is sometimes more important than how much.

It has to do with the qualities of the debt.

I get into it in this week’s video:

Avoid debt troubles with a proper cash flow forecast:

Learn how to buy an already-successful and profitable business even in the covid-recession of 2020   

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