We had someone approach us with additional funding that was based upon the performance of the business. For example if the business did well they would get more back from the loan if it did worse they would get less back. What do you think is this a good idea.

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Why would they do that it seems very risky they could give you a loan and then your business performs poorly and they get nothing back - and they have no control over it.

Most agreements like this have a collar so the sellor of the note does not participate in the downside as much as the owner as well as the upside

What do you mean by collar?

A collar is a tool that helps you eliminate much of the risk in a transaction on the updside and the downside it is used a lot in option trading of large shares

We have used a collar in previous transactions and they have worked well and they protect both sides I would strongly encourage it.

If you need funding, give me a call @ 866-283-5198...I have an alternative financing company that specializes in getting money for small and medium size businesses....

Jason