Is sale of firm affected by lien?

Dear Karen: I’m selling my dry cleaning business and just learned it has an old bank lien on it. Will this invalidate my sale?

Answer: You’ll have to pay off the lien or at least negotiate with the bank to keep the sale on track, said Todd Elliott, a real estate lawyer at Truman & Elliott in Los Angeles. Ask a real estate attorney to examine the lien.

“If the lien is enforceable, depending on the amount owed and the condition of and value of the equipment to which the lien attaches, your attorney may be able to negotiate with the holder of the lien to accept less than face value,” Elliott said. Ask the attorney whether you have any legal recourse against the prior owners who failed to disclose the lien.

You should have had an escrow company conduct a lien search when you purchased the business.

“It is important to always utilize the services of a professional escrow company familiar with completing a ‘bulk sale transfer’ -- a transfer of equipment or goods -- when purchasing a business,” Elliott said.

Credit treatment can cut card fees

Dear Karen: I saw your recent discussion on credit card fees. I work for a credit processor and found that 85% of merchants don’t know that they can get “straight pass through” treatment to help reduce their fees and surcharges.

Answer: You’re right about the benefits of straight pass through, but it’s likely that more than 95% of small merchants are unaware of it, said Bob Carr, chairman of Heartland Payment Systems Inc. of Princeton, N.J.

Straight pass through treatment, common for larger merchants, means that you’re charged the Visa and MasterCard interchange rates without extra costs added on from various credit processors. The processing fees are listed separately, so your costs are more transparent. Few small retailers get the benefit because they don’t know to ask for it, Carr said.

Ask your credit card processor to separate out what they are charging you from the interchange rates. “You may find as many as 12 middlemen processors, all charging fees you never knew about,” he said.

Gifts can help business stand out

Dear Karen: I usually send gifts to clients during the holidays, but I’m thinking of opting out this year. Can I just send greeting cards?

Answer: A card with a personal note from you will do if your business is really hurting. Explain why you are cutting back and remind your customers how much you value their business, particularly this year.

If you can manage a small gift for your longtime customers or can make a charitable contribution in their name, you’ll probably stand out in a year when many firms aren’t acknowledging the holidays.

“This may be a time to recapture some lost business etiquette of days past,” said Greg Roberts, president of Metropolitan Gifts of Los Angeles. “Write a handwritten letter to important employees, clients or customers and business partners, accompanying a small but personally meaningful gift. People will be reassured about your core values and are more likely to be loyal through tough times.”