Two offers of S$3m can be worth very different amounts. Enter how the price is paid and the terms attached, and see what the offer is worth today, which terms to push back on, and what to ask the buyer. About three minutes. No email, and nothing you enter leaves this page.
Every payment after completion is weighed twice: for the chance it is paid in full, and for the wait, at 8% a year. A vendor loan’s interest offsets the wait. Add the results to the cash at completion and you have what the offer is worth today, on rules of thumb drawn from how Singapore SME deals tend to play out.
| Part of the price | Chance paid in full | Why |
|---|---|---|
| Cash at completion | 100% | Paid on the day. Debt, cash and prepayments are taken off or added here. |
| Retention against warranty claims | 90% | Usually released, less any agreed claims. |
| Fixed deferred payment, secured or guaranteed | 95% | A guarantee or a charge over the shares means you can recover it. |
| Fixed deferred payment, unsecured | 85% | Depends on the buyer being able and willing to pay on the day. |
| Earn-out, targets below what you earn today | 75% | Paid if the business simply holds its ground. |
| Earn-out, targets about what you earn today | 55% | Any dip after the handover costs you. |
| Earn-out, targets that need growth | 30% | Most earn-outs that need growth pay only in part. |
| Earn-out measured on profit, not revenue | × 0.9 | The buyer’s own costs and charges can reduce profit. |
| Earn-out while you no longer run the business | × 0.8 | You are paid on results you cannot steer. |
| Vendor loan, secured | 90% | Repaid from the business, with security if it is not. |
| Vendor loan, unsecured | 70% | Usually ranks behind the bank if the business struggles. |
| Shares in a listed buyer | 75% | The share price can fall before your lock-in ends. |
| Shares in a private buyer | 50% | No market to sell them in, and you are a minority holder. |
These are starting points, not predictions. A strong buyer, a well-drafted agreement or good security moves them up; a stretched buyer or vague targets move them down. Read our guide to deal structures for how each part works.
Most of the money is paid at completion or is very likely to follow. The remaining points are worth negotiating, but the structure is sound.
A solid core, but part of the price depends on things that may not happen. Negotiating the terms below could be worth as much as a higher headline.
A large share of the price is paid later or on conditions. Compare it with other offers on what each is worth today, not on the headline.
On these terms you carry much of the risk of the business after you sell it. Push for more cash at completion, or treat the headline as a much lower number.
Look past the headline. Start with the cash you receive at completion, after debt and any retention. Then judge each later payment on when it is due and how likely it is to be paid: fixed deferred payments, earn-outs, vendor loans and shares in the buyer. Finally compare the headline with what businesses in your sector usually sell for, and read the terms attached: exclusivity, funding, your role after the sale and how cash and working capital are defined.
In 23 disclosed Singapore deals, a median of 72% of the price was paid in cash at completion, ranging from nil to 100%. The rest is deferred, paid in shares, tied to an earn-out or held back. Less than half at completion means you carry much of the risk of the business after you have sold it.
No. A S$3m offer paying S$2.7m at completion can be worth more than a S$3.5m offer paying S$1.5m at completion and the rest on targets that need growth. Compare offers on what each is worth today, and on the risk attached to everything that is not paid on the day.
By how likely the targets are to be met and how long you wait. Targets below what the business earns today are the most likely to pay, targets that need growth the least. Earn-outs measured on profit, or paid while you no longer run the business, are marked down further, because decisions you do not control can reduce them. The rules of thumb are shown in full below.
Ideally not. While exclusive you cannot speak to other buyers, so a buyer who cannot fund the deal costs you months and risks a leak. Ask for proof of funds or a bank’s letter of support first, and keep exclusivity to around 60 days, extendable only if both sides agree.
No. The checker runs in your browser and nothing you type is sent to us or anyone else. If you choose to email yourself the result, or send it to Ben, only then is it shared.
Heads of terms are usually not binding on price, but they set the frame for everything after. Ben will read the offer with you, tell you honestly what it is worth and what to push back on, and keep it strictly confidential. The first conversation is free and carries no obligation.
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