Which of the following statements concerning the financing of a business purchase is true?
A)Often,the business seller is a poor source of financing.
B)The buyer should be able to make the payments on the loans out of the company's cash flow.
C)The buyer should begin arranging financing late in the purchasing process,to avoid the processing expenses if the deal falls through.
D)Traditional lenders tend to be more eager to lend on an existing business than they are with a start-up.

Question

Quizplus · Accepted Answer

The buyer should be able to make the payments on the loans out of the company's cash flow. This means that the buyer should have a comprehensive understanding of the business's financials and projections to ensure that the purchase would not negatively affect the company's ability to make loan payments. The other options are not necessarily true or relevant - it depends on the specific situation.

Which of the Following Statements Concerning the Financing of a Business