Stanton Financing Guide

Venture capital backed businesses often have as a major objective getting on the “fast track,” that is, seeking very rapid growth toward a liquidity event, such as a sale or public offering. When this is the case, the early performance of the business is under rather close scrutiny by the initial investors, and will undergo very detailed analysis by prospective buyers and investors as their decision on commitment to the investment nears.

The new round of investors must analyze what they are acquiring besides the physical assets of the business. They are investing in or obligating themselves to the continued operation of the business, and a performance level that justifies the amount of the investment. Prospective investors must assess the environment in which the company is operating, and generate a forecast of how far it might go under their stewardship.

Did the company enjoy some “first mover” advantage in the early performance figures, which the competition has since neutralized? Are there some patents or processes that will keep the company ahead of the curve for a while longer?

The business must be evaluated as an entry in a competitive system. The state of competition, and the relative strength of the business within the market are strong indicators of the business’ prospects for surviving and thriving. Is the brand strong, highly recognizable, thought well of? Is it extendible, or already being stretched? Is there a strategic “pruning” that could improve the business’ focus and prospects?

If there has been a decline in the number of competitors, investors must assess whether it is normal turnover in a dynamic marketplace, or whether the revenue model for this type of business is flawed.

Another consideration is whether there is some untapped value in the company. Perhaps it has been strapped for cash, when a vigorous (and expensive) ad campaign could improve its competitive situation dramatically. Possibly, it is only one product or process from a major breakthrough, and fresh capital could enable an acquisition that solves the problem. There may also be some cross-marketing or strategic partnership opportunities that could take the business to the next level.

The history of sales growth within the company and in relation to similar businesses is another measure of company progress. Seasonal fluctuations can be significant when we have a relatively short history to consider. For example, how much better was this holiday gift-giving season than last? Are there any cyclical issues at work? Is ours a luxury product that flourishes only when times are prosperous?

How are the longer-range patterns of change in the industry going to affect the company? Are they well positioned for the wireless, broadband, palm-size, global world we are becoming? Are there any changes in the regulatory atmosphere that could have an impact? Are they a relatively high-cost provider in an industry that is becoming increasingly price driven?

When the business and the market have been analyzed, the probable sales volume of the business can be forecast. In rapid growth companies, sales are frequently expected to be accelerating. Unlike traditional sales forecasting, we are not simply looking at minor changes in slope of a 10-year sales increase “ramp.”

If a specific month of our second year showed some percentage growth in sales over the comparable month of our first, should we extend this rate into the third year? Since the company is so new, are the forecasts from the original business plan still useful? How well has the company done so far with respect to plan?

The reliability of a forecast is always uncertain. Attempting to forecast in today’s dynamic environment is especially difficult. We are in a period of rapid technological change that has shortened the business cycle dramatically.

Past performance is no guarantee, and often not even an indicator, of the future. Still, the basic value in making a forecast is that it forces the investor to look at the future objectively. A forecast does not eliminate the need for value judgments, but it does require the forecaster to identify elements influencing the future.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

A person involved in litigation of any kind, say a malpractice or an accident, is rarely a lawyer. He or she does not have the least idea as to ‘how to go about the situation and recover the losses’. To top it all, often, their savings will not suffice in any way to fight the case.

Hence, they seek the help of an expert attorney. The hired attorney is one who is an experienced expert in the kind of case the person is involved in. For instance, if it is a case of dental malpractice, the client approaches an attorney specializing in the same field. Once the attorney prepares the case and files, he or she negotiates with a suitable Litigation Financing Company.

Litigation Financing Companies are known to offer litigation loans or take care of the expenses of needy clients to fight the case. Though called litigation loans, they are in fact an advance or an investment that is free from monthly payments. The companies do not give loans or pre-settlement advances to just any individual. When the attorney or the individual approaches the company, it first evaluates the case for its case worthiness. Based on its analysis, it fixes up an amount as loan. In return, the company buys a portion of possible settlement charges due to the individual. The company recovers its share from the settlement charges entitled to the individual only after the case is won.

Similarly, the company stands to lose if the individual or plaintiff loses the case. The situation is the same, even if the individual gets a very small amount as settlement charges. In short, the company cannot recover its funds if the individual does not get a good recovery or loses the case. As such, the company runs the risk when transferring funds for every litigation case. But the client has to make an initial payment to the company he or she is availing to for Litigation Financing. Since the fee charges are on the higher side, one has to take the guidance from the attorney. Litigation Financing Companies handle a range of cases. While some Litigation Financing Companies give advances for personal injury, auto accidents, ceiling collapse cases, there are others specializing in commercial and patent Litigation Financing.

Litigation Financing provides detailed information about litigation financing, commercial litigation financing, litigation cash advances, litigation financing companies and more. Litigation Financing is the sister site of Lawsuit Funding Companies.

If you are buying a car after bankruptcy, here are a few suggestions that could help:

First, you want to make sure you’ve done everything you can
to increase your credit score. Once you’ve done that you’re ready to start shopping for your car!

Here’s a question for you: Is it better to get outside financing or get financing through the dealership when you are buying a car after bankruptcy. The answer is… drum roll please… it depends!

It’s worthwhile to apply for outside financing when buying a car
after bankruptcy. But make sure you do it through the right lender. If you don’t, you could end up paying $100s or $1,000s more in extra interest. If you even get approved at all.

Now let’s assume you’ve done your homework. You found the
car you like, you know how much that make and model sells for, and you know how much your trade in is worth. It’s time to visit the dealership…

Let’s say you find the specific car you want to buy. Now you’re going to need to negotiate the price.

If you lined up outside financing, then you’re in a good
position from a negotiating standpoint. But what if you could
not get outside financing for a car after bankruptcy? What if
you need to depend on the dealership to get you financed when
buying the car after bankruptcy?

Many people think that since they had a bankruptcy they are
at the mercy of the car dealership in this situation. THIS
SIMPLY IS NOT TRUE!

Let me share a little secret with you: If the dealership has
run your credit report and they start negotiating with you,
then they’re pretty sure they can finance you. After all, do you really think they would waste their time negotiating a price with someone they did not think they could finance? Of course not!

Here’s where things get interesting. How many times a year does the dealership negotiate with buyers? Probably hundreds of times a year at a decent sized dealership. Now what about you – how many times do you negotiate for a car? If you are like most people, it’s probably once every so many years.

Most people will thoroughly research the price of the car
they want to buy. If it’s new they’ll take time to find out the dealership’s cost and, if they have one, the value of their trade in.

…and they’ll go back and forth with the dealership for two or
three hours until everyone agrees on the numbers and a sale takes place.

Chances are the buyer still may have left a pile of money on the table – and didn’t even know it. The reason the buyer probably left money on the table is that they more than likely made two critical mistakes without even being aware of it. One mistake was that they didn’t negotiate all five parts of the sale separately. The price of the car is just one part.

On that note, another step you will want to take is to improve your car buying skills. How? Visit websites that provide car buying tips. Another way is to pick up a good book on how to buy a car – you can find quite a few of them out there. Unfortunately, I have not run across any that provide specific information on buying a car after bankruptcy. However, After Bankruptcy Credit Solutions does cover this topic in detail – so the information is out there.

Other than a home, buying a car is one of the bigger purchases
you’re going to make. You need to AVOID any mistakes that can
cost you up to $100s or $1,000s of dollars in extra interest. In other words, you simply can’t afford not to get things right when you’re buying a car after bankruptcy.

This article covered some steps you can take which could help when buying a car after bankruptcy. Put them to use and they could save you from making some expensive mistakes!

================================================================

Copyright © 2006 Innovative Solutions Publishing, Inc. All rights reserved.

DISCLAIMER:

This information is designed to provide only a general overview
of the subject matter herein.

This information is provided with the understanding that neither
the publisher nor author is engaged in rendering legal,
accounting or other professional advice. If legal or other
expert assistance is required, the services of a professional
should be sought.

Neither the publisher nor author shall be liable for any loss or
damages, including but not limited to special, consequential,
incidental or other damages, caused by the information contained
herein.

================================================================

About the Author: R. Lawrence Anderson is author of After Bankruptcy Credit Solutions, which shows individuals how to qualify for credit and loans after bankruptcy – it also covers the topic of buying a car after bankruptcy.

1) Do your homework. Applying for and getting approved for a credit card is nothing more than legwork. Credit card contracts can sometimes contain onerous terms that might make you sorry that you signed up for the new card that you did. Read the fine print carefully. If a deal looks to good to be true, it just might be. Credit cards can be a great way to finance your purchases, but make sure it’s not at such an expense that you end up paying for a long time afterward.

2) Read about the APR. The APR stands for “annual percentage rate”. Yes, the APR of a credit card is important no matter what people tell you. A low APR for a credit card is more critical than you think. When you sign up for your new card, you probably are thinking that “hey, all I never miss a payment so who cares what the APR is?” The fact of the matter is, expenses come up. Unexpected expenses that you have to pay for no matter what. If your credit card’s APR is low and when those expenses arise, you will be in a better financial position when you pay it off. You would rather pay off your a credit card’s 4% on $1000 than 15% on $1000. This can make a world of difference.

3) Compare offers. Not all credit card offers are made the same. All credit cards that you see will appear to be physically similar (made out of plastic), but these credit cards can often be worlds apart. Some offer reward points, sky miles, cash back, and bonus dividends, while most offer nothing at all. If you are going to pick a card, make sure you get the most out of it you can. Finding out later that you could have had 50,000 Sky miles when you actually got none can be quite a surprise. Compare offers, compare banks, and get the best credit card deal you can.

This article may be freely reproduced and distributed as long it is not altered and the link below is kept live.

Want to learn about credit cards? Visit http://www.thecreditcardlistings.com today.

Entrepreneurial ventures are constantly in the market for new capital. Experienced entrepreneurs realize that the financing of companies is done in stages and that they have to be flexible in identifying the latest trends in financing.

For many startup entrepreneurs, initial financing can be the hardest part of launching their new business. It is a popular misconception that an idea, a startup team, and a preliminary business plan will get them in the venture capitalist door. They expect to exit, happily, with the check in hand.

Unfortunately, traditional venture capital, i.e. funds supported by institutional investors, only finances a fraction of the new companies started each year. Over 90 percent of startup money comes from private sources and it is up to the individual entrepreneur to identify and sell their project to these financing sources.

Begin With a Business Plan

Whether you need to raise money or not, any prospective venture should begin with a business plan. This should include:

Purpose and Objectives–a summary of the what and why of the project.

Proposed Financing–the amount of money you’ll need from the beginning to the maturity of the project proposed, how the proceeds will be used, how you plan to structure the financing, and why the amount designated is required.

Marketing–a description of the market segment you’ve got or plan to get, the competition, the characteristics of the market, and your plans (with costs) for getting or holding the market segment you’re aiming at.

History of the Firm–a summary of significant financial and organizational milestones, description of employees and employee relations, explanations of banking relationships, recounting of major services or products your firm has offered during its existence, and the like.

Description of the Product or Service–a full description of the product (process) or service offered by the firm and the costs associated with it in detail.

Financial Statements–both for the past few years and pro forma projections (balance sheets, income statements, and cash flows) for the next 3-5 years, showing the effect anticipated if the project is undertaken and if the financing is secured. (This should include an analysis of key variables affecting financial performance, showing what could happen if the projected level of revenue is not attained.)

Capitalization–a list of shareholders, how much is invested to date, and in what form (equity/debt).

Biographical Sketches–the work histories and qualifications of key owners/employees.

Principal Suppliers and Customers

Problems Anticipated and Other Pertinent Information–a candid discussion of any contingent liabilities, pending litigation, tax or patent difficulties, and any other contingencies that might affect the project you’re proposing.

Advantages–a discussion of what’s special about your product, service, marketing plans or channels that gives your project unique leverage.

Provisions of the Investment Proposal–State the financial offer precisely. For a loan, state what interest rate you are willing to pay, and whether on a monthly, quarterly or annual basis. For investors, are you offering a certain percentage of the profits, a percentage of business ownership, a seat on your board of directors?

Venture investors are usually quite familiar with “high risk” proposals, yet they all want to minimize that risk as much as possible. Include a listing of your business and personal assets with documentation. In most cases, if you’ve got a good idea and you’ve done your homework properly, an interested investor will buy in.

What all entrepreneurs soon discover is that there are several factors that are affected by the method of raising funds, such as distribution of equity ownership, potential restrictions on daily operating flexibility, and debt-imposed constraints on future growth.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

Essentials

So what are you going to need in order to get into this real estate game that just seems to keep getting better as the market continues to raise the value of homes month after month? Well, there are a couple of routes that you can go and the equipment, skills, and resources required for each of them is different.

If you are looking to enter into the rental property game, then you will need some hand tools and equipment in order to make repairs and improvements to the property. Now you can outsource this work to professionals but that will definitely eat into your potential profits.

For those more interested in buying a property and then turning it around for a quick profit after making some minor improvements, great credit is probably more important than your skills with a hammer. Of course you will also need good credit to get into the rental property game, but it is not quite as important.

In either event, anyone entering into the real estate investment business will need to do a lot of homework and familiarize themselves with the vast number of real estate loans available on the market today. One of the most important loans to consider using for those looking to quickly turn around a property is the interest-only loan. This means that you only have to pay the interest on the loan for a certain period of time, usually 3, 5, 7, or 10 years. This loan will put more money in your pockets and allow you to make any necessary improvements.

Another tool in your arsenal is called the rebate option. Now in return for accepting a higher interest rate on your loan, a lender will give you a rebate that often is thousands of dollars. Although it would be a terrible option if you were wanting to keep the home, it is a great tool as it puts cash in your pockets that you can use to improve the home and then sell it for a profit.

An interest-only loan is not a good idea if you want to get into rental properties. Here, you want a fixed-rate loan with a large down payment. The more equity you build in your rental property, the quicker you can buy another. An adjustable-rate-mortgage may seem tempting, but this can really hurt you in the future should rates climb. You want to keep rent at a price above the mortgage payment amount so that you are always paying off your principal loan amount so an adjustable rate mortgage could really compromise your ability to do this: remember, you can’t raise rent until a lease has expired!

A real estate investment business can certainly be a path to financial security and that lifestyle you have always dreamed of, but you had better know everything there is to know about mortgage loans and how they work if you plan on being successful. The wrong loan for the wrong reasons can actually bankrupt you so be sure to do your homework before getting into the real estate investment business.

Chris Navi I am a true freelance internet advertiser who dabbles in website design. You can check out resources for having a profitable travel cruise business at my website http://www.getpaid2workfromhome.com/real-estate-investing/. Also check out the 10 best places to advertise online that are completely FREE at: http://www.advertisesmallbusiness.com//free-online-ads

Are you the victim of a high interest rate auto loan? If so, the following email discussion may help you. Read on:

DEAR LoanResources.Net:

I was very impressed with your article entitled “8 Point Checklist, Evaluating Online Lenders.”

I have tried several sources to refinance my auto. I only have 2 more years to pay $245.04 a month. I owe 4,414.00 on the car loan.

This may not seem like a lot of money but I would like a lower interest rate on my car loan which is now $16.4% APR.

I want to still pay it off in 24 months but at a lower rate so that I can use the money saved to help pay off other bills.

In my internet searches, the auto refinance loans required that you borrow more money than I need. I tried to search for unsecured personal loans on your website and they also required that I borrow more money.

I have a very good credit record and I am working to get some of my bills paid off.

Is there anything you can suggest so that I can get a lower rate auto loan for under $5,000? Any assistance will be appreciated.

Thanks. Geraldine W.

DEAR Geraldine:

Sorry I have not gotten back to you sooner. I took a couple weeks off to be with family…Thanks for the compliment on the article!

Anyway, I read your email and I do indeed have a suggestion or two that I’m happy to share.

A COUPLE THINGS INITIALLY:

1. First, you’re paying a very high interest rate at 16.4% APR for an auto loan! I’m going to assume that your statement as to your good credit is accurate. If that’s true, then you do indeed need to fix this.

2. Since you only need $5000, with the intention of paying it off in 2 years or less, I don’t think you should look for a refinance auto loan or a refinance on your home. Indeed, the bank is going to want to loan you much more money, usually at least $25,000. While a refinance or equity loan on your home does offer tax benefits, we’re only talking about interest on $5,000 over the course of 2 years. I have another idea you may not have considered.

HAVE YOU CONSIDERED?

Have you considered just putting the balance of your car loan on a credit card that has a lower interest rate?

1. Credit Cards are, indeed, unsecured lines of credit with financial institutions.

2. They are the perfect financial vehicle for a $5,000 transfer of debt, with added flexibility, and you should be able to find an interest rate between 9 to 11%, and better, on average.

3. IN ADDITION! Once approved, the bank will usually give you blank checks for balance transfers (sometimes they’ll just do it for you right over the phone)…,

4. AND GUESS WHAT? The majority of the time, the incentive interest rates on the balance transfers are EXTREMELY low; sometimes zero percent for up to 6 months to a year.

5. IN ADDITION! you can apply for incentive cards that provide rewards for your spending….free airline miles, cash back programs, etc. I use the American Express Blue, and I get cash back of up to 3% on everything I spend. So, for $5,000, 3% cash back, AMEX

Litigation is a very costly affair. An individual involved in litigation needs good financial backing to work out the case, hire a lawyer, and settle court dues and other small and big expenses. Most people fighting lawsuits may face financial hardships. They may not even go in for a fair settlement. At such a time, the Litigation Financing comes in handy.

Companies offer Litigation Financing to those persons, attorneys or companies awaiting a fair settlement. This is the fund given as advance or pre-settlement charges. Litigation Financing is a non-recourse settlement that helps the individual financially in times of litigation. No matter how meritorious his or her claim for redress of grievances is, they may not succeed in litigation all alone. Hence, they hire an attorney who has specialized in the kind of case the individual is involved in.

For instance, a veterinarian will approach a specialist attorney in veterinary malpractice cases. After building up and filing a case, the individual avails himself of Litigation Financing from a Litigation Financing Company, through the attorney. The company, based on its evaluation of the case worthiness, fixes the fund. The Litigation Financing is often non-recourse in nature. The individual or company needs to clear its dues according to the agreement signed with the company. That is, the company buys a portion of the settlement charges as recovery. The payment is made only if the case is won. Litigation Financing is thus a pre-settlement charge given as an advance to the client approaching a Litigation Financing company. The company recovers the ‘financial help’ if and only if the client wins the case. Of course the individual has to make an initial fee payment. Litigation Financing is offered for personal injury, accidents, malpractice, wall collapse and other such cases.

Litigation Financing provides detailed information about litigation financing, commercial litigation financing, litigation cash advances, litigation financing companies and more. Litigation Financing is the sister site of Lawsuit Funding Companies.

I don’t know about you, but hardly a day goes by I don’t receive spam emails about grants. Spam that absolutely promises me I can buy a book and get a $30,000 grant, just for being alive on the planet. Spam that assures me there are grants available to pay my credit card bills, start any kind of business, or buy a shiny new car.

To some degree, those spam emails are why I established a website devoted to grants. Because I have been a grants consultant for thirty years, I know the truth about grants, and I want to share that truth with you.

The truth about grants is a good news/bad news proposition. Let’s get the bad news out of the way first:

Nobody is going to award you a grant of $20,000 or $30,000 to spend at Saks, or pay your bills. Nobody is going to give you cash to start a network marketing business. Nobody is going to buy you a new Mercedes to drive around the neighborhood.

But really, in your heart of hearts, you already knew that – right?

Now for the good news about grantsand there is some very, very good news indeed:

Every year in the United States alone, $360 billion is available in grant funding for individuals, businesses, and non-profit organizations. This is the real thing, money that is genuinely available from solid, dependable funding organizations.

There are grants for college, grants to pay for medical care and drugs, and grants to support research and study projects. There are some government grants available to certain established businesses, and a very limited number of grants to start new businesses.

There are grants for women and for minorities, grants to buy homes, grants to acquire and repair rental properties, and grants to develop new products that will help the environment. There are grants to fund a virtually unlimited number of community projects. If you have a project that offers some social value, there is probably a funder who has a grant for which you can apply.

Government agencies, foundations, and corporations all make grants. Almost universally, grants do not need to be repaid, and grants are tax-free.

Are you beginning to see the scope of this?

To help people understand just how much potential there is in grants, I often describe grants funding as a “parallel economy”. There is the standard economy, where goods and services are bought and sold, and taxes paid. Then there is the parallel economy of grants, where gifts are requested and received.

Not just a few gifts. Three hundred sixty billion dollars in gifts.

So is there a trick involved in getting grants? No. But, as is true in any situation in life, there is a framework within which the successful grantseeker must operate. If you want to profit from grants, you must put forth the time and effort to learn how this parallel economy operates, and how to play by its rules.

First, grants are all about purpose. Every grant is offered and awarded in order to accomplish a specific purpose. Every funding agency has a mission it wants to carry out, and grants are given to further that mission. So if you want to start a children’s orchestra in your town, you must find the funder who considers musical programs for children part of its mission. If you have invented a better trash compactor, then you are looking for a funder with an environmental mission.

Second, there are a host of resources for finding and identifying grants. You must learn about the types of grants, who is making them, and how to locate them. You must learn how to tailor your project to potential funders.

Third, there is a specific format for requesting grants, called a grant proposal. Although there are many different types of grants, the basic grant proposal format can be adapted to all of them. You must learn how to write a good proposal, and assemble all the information a funder will want to see.

This all sounds a bit more complicated than just buying a book, right? So the question becomes, is it worth the effort?

Well, I’ve raised millions of dollars in grant funds for my clients, and for myself. I bought an apartment complex free and clear, without a penny of my own money, with a grant. I absolutely believe it’s worth the time and effort involved. Where else but in the parallel economy of grants, can you ask for what you need, and receive it as a gift?

2003 – 2005 (c) Jillian Coleman Wheeler

Jillian Coleman Wheeler is a Grants and Business Consultant. Her website, http://www.GrantMeRich.com, is a resource site for entrepreneurs, grant writers and consultants, and offers online training for grants consultants. She is also author of The New American Land Rush: How to Buy Real Estate with Government Money. For information: http://www.NewAmericanLandRush.com You may reprint this article, if you credit the author and include this
resource box. Please notify the author of publication information: jillian@grantmerich.com

Should you decide to buy an existing business, several factors enter into consideration of how to finance it. Let us discuss the most important of these factors.

The amount of capital required.

Nearly all sales of small businesses are, strictly speaking, merely sales of the assets of the business. The buyer does not want to purchase “the business” because that would include liabilities, including unpaid taxes, exposure to law suits under the prior ownership, etc. This is not to say, however, that the amount agreed upon is all the buyer needs.

Buyers commonly underestimate the amount of capital required to purchase a business. Capital must be available not only to pay the purchase price but also for:

funds to operate until the business is generating cash,

funds to meet unexpected expenses, and

funds as a reserve to allow for errors in expectations.

A buyer must think beyond the purchase price to determine the amount of capital needed. Here are some questions that must be asked:

Do I have enough capital to pay the purchase price?

Do I have enough capital to support 1 to 3 months’ operations–such as payroll and other cash expenses–while the business reaches a self-supporting stage?

Do I have some extra capital to cover needs I may have overlooked (perhaps 10 to 15 percent of the purchase price?

The type of capital required.

The buyer must decide how much of the selling price will be covered by equity capital, i.e. investment in the business by the owner or owners, and debt capital, borrowing that must be repaid.

If a combination is to be used, the equity capital provides a margin of safety for a lender. The greater the amount of equity capital, other things being equal, the easier it is to get debt capital.

In purchases of small businesses, the primary source of equity capital is generally the personal savings of the buyer of the business. Few buyers, however, have enough personal savings to finance the purchase of a small business without any debt financing.

The sources of available capital.

An individual may borrow money for the purchase of a business by obtaining a personal loan, by borrowing against insurance policies, or by refinancing a home mortgage. These debts are not direct debts of the business, but the debts of a small business and the personal debts of the owner cannot be completely separated. Banks are the principal institutional source of debt capital for small businesses.

The seller will sometimes finance part of the cost of the sale directly. Sometimes this can make the buyer wonder whether the seller is too interested in getting out from under the business, or if the business is as good as it looks.

The length of time needed to pay back the capital source from the business operation.

No matter where debt originates, a critical question is whether the business can support the debt payments in addition to all the other costs of doing business.

Due diligence: Evidence of ownership

The buyer should get from the seller a certified abstract of title for each parcel of real estate involved in the transaction. The abstract should be examined by the buyer’s attorney. In addition to disclosing any defects in the title, examination of the abstract and the abstractor’s certificate will usually show whether there are any unreleased mortgages, judgment liens, mechanics’ liens, tax liens, or unpaid real-estate taxes and special assessments.

The seller should be asked to show evidence of ownership of principal items of personal property in the form of bills of sales, receipts, assignments, motor-vehicle title certificates, and so on. Such evidence will not prove that there are no recorded liens against the property, but lack of it should alert the buyer to the possibility that personal property in the physical possession of the seller is rented, leased, borrowed, or delivered on consignment.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.