Owner knowledge · Questions & answers
Difficult business sales
Freely accessible answers to UK business owners’ questions about selling, valuation, buyers, retirement, ownership transfers, advisers and the sale process. No payment or registration is required.
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Difficult business sales
1 questionsShould I repay all debt before selling my SME?
Not automatically. Review liquidity needs and the proposed price mechanism with advisers, including how cash, debt and working capital will be treated.
What this means in practice
Paying down borrowing may reduce finance costs, but using operating cash can leave the business short of funds for stock, payroll or seasonal needs. First understand how the proposed transaction treats debt and surplus cash. Owners should model the effect on both completion proceeds and day-to-day liquidity before making repayments solely to improve presentation.
What the owner should consider
Debt definitions, repayment restrictions and working capital requirements vary; coordinate any action with financial and legal advisers.
Read the full difficult business sales guide
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