The biggest problem in all of small business is not high rent costs or finding trustworthy labor or even heightened competition. Those are certainly challenges that all business owners face. The biggest problem is the lack of financing. In the small business world, a business buyer generally has an extremely tough time funding his or her business purchase. Why? Most small businesses claim they are generating ‘x’ cash flow but their tax returns say otherwise. Where is all the cash going? Check the business owner’s mattress! All too often we see businesses breaking even yet the business owner is driving around in a BMW. Margins are so slim in some of these businesses that business owners feel compelled to hide money. But this creates a problem. When the business owner wants to eventually sell, they end up having to be the bank because they are the only person that understands the business and more importantly its income generating ability. A traditional bank does not and is unable to verify it. So the business owner lends money to the business buyer in a seller-financing scenario. More.