Would it be better to put down 20 percent, 33 percent or 50 percent toward the purchase of an existing business?

While leverage can maximize your returns, it can also increase your risk. While putting down less money to buy a business will free up capital to acquire other companies, that strategy may backfire if the first business runs into problems and fails to generate the cash flow you’re expecting. Your strategy may also inflate the prices of the businesses you acquire since sellers who are willing to accept less money now are probably going to demand a bigger payout down the road.

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