A client is looking to sell his business and has brought some material he has received from an intermediary selling him the idea of a monetized installment sale.
Essentially, he would sell his business to another party under an installment contract then go and secure a loan for roughly the same amount. The proposed transaction, pushed by the intermediary (assume a sale price of 2 million), would include the buyer depositing 1.5 million with the intermediary and the seller using 500k from the loan to loan to the buyer so the buyer can give the intermediary an additional 500k. The intermediary then pays the seller according to the contract. The seller does not have any recourse if the intermediary defaults other than to sue the intermediary corporation (at which point I would assume they would not have any assets). Additionally, the loan the seller is supposed to secure to "monetize" the transaction would actually require that the note not be secured by the installment contract as that would violate the installment portion of the transaction per the Code.
Furthermore, the entire transaction, being sold by the intermediary is based on this one field agent advice memo - https://www.irs.gov/pub/irs-lafa/20123401F.pdf
I have read the memo and believe the proposed transaction fails in almost every aspect (according to relied upon memo) and seems like a total scam given that the intermediary will receive a fee of 5% of 2,000,000 AND the entire sale amount to "invest" and pay the seller according to the terms of the contract.
Does this appear to almost certainly be a scam to anybody else or am I just not up to speed on this type of thing?