I have a holding company with 4 businesses, and am looking to add several to my portfolio over the next few years. Instead of just doing seller financing like I have done when I sell a company, I was thinking of establishing an independent lending company specifically to finance buyers who purchase businesses from my portfolio. The idea is to “double dip” on the interest, earning not just from the sale of the business but also from the loan interest. I have an associate ready to manage this lending company, which would use my funds to lend to buyers.
For example, if I sell a company for $1,000,000 and offer financing at 10% (lower than an SBA loan @ 11.25%), I make an extra $275,000 over a 5 year loan.
I’m looking for resources on if this setup has been done before. Any advice/concerns appreciated!