Month: September 2015

Non-Recourse v Recourse Financing

Typically a non-recourse loan is one in which the lender looks to the company to pay the loan and cannot go back to collect from the principal. Recourse financing is one in which they can go back and collect from the principal(s). Thus the lenders may have “recourse” to go against whoever guaranteed the loan which is generally one or more of the principals of the company. This concept of recourse is what we call a “personal guarantee”.

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Reasons Not To Buy a High Tech Company

A subscriber asked me the other day why I did not recommend buying a software company. In fact, I do recommend buying a software company… if it is cheap. However for first, or even fifth time buyers I think it is a good idea to stay away from high tech companies in general for a number of reasons.

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