The business sale price includes shares rather than all cash

The reported sale price is not entirely money

Your debtor announces that the business sold for a substantial price, but later explains that part was paid in shares. Ask what was actually received before relying on the sale to fund your invoice. A completed transaction can produce valuable consideration without producing the cash the debtor said would be available for creditors.

Request an appropriate breakdown

Ask for confirmation of cash received, non-cash consideration and any relevant restrictions affecting the proposed payment source. You may not be entitled to every sale document, so discuss proportionate information requests with your adviser. Distinguish the seller's headline valuation from an independently verified amount that can presently be converted into money.

Examine the payment method

Business.gov.au identifies the method of payment as a matter to address in a business sale contract. Ask your adviser to assess the evidence of the particular consideration received and its implications for the payment promise. This article does not value shares, recommend selling them or determine rights under the sale agreement.

Source: business.gov.au: Sell your business

Consider a hypothetical mixed price

Imagine a seller receives some cash and shares in the buyer, while describing the whole transaction as a cash-funded exit. The shares may be unlisted or subject to restrictions that need advice. Do not use their stated value as an immediate receipt in your own forecast. The relevant question is what supported funds are available for the account.

Assess any proposed alternative settlement carefully

If the debtor offers the shares themselves instead of money, obtain separate legal and financial advice before accepting. Consider the actual rights, transfer process and risks rather than comparing only a stated value with the invoice. Do not assume accepting an asset preserves the original debt unless the advised settlement terms establish the intended position.

Keep cash and other consideration distinct

Retain the written explanation and update collection expectations using confirmed information. Continue addressing any formal recovery requirements with advice. The practical decision is whether the completed sale has produced a credible source of payment, without confusing a transaction value, a non-cash asset and money that can actually settle the overdue account.