Business Valuation Glossary
Return on Downpayment
The annual return on the business buyer’s downpayment, expressed as a percentage.
What It Means
The return on downpayment is the required rate of return on the business buyer’s downpayment, expressed as an annual percentage. The return on downpayment is a key consideration used in defining the small business purchase price and terms.
The Deal Check calculation in ValuAdder automatically accounts for the required return on downpayment when determining the business cash flow necessary to make the deal work.