Seller financing can help buyers acquire a business while reducing the upfront cash requirement. Learn how seller notes can structure a transaction.
Seller financing gets discussed a lot.
But here’s the reality:
It’s not free money.
1. What Is Seller Financing?
The seller accepts a note and gets paid over time.
2. Why Would a Seller Do It?
Sometimes it helps bridge valuation or financing gaps.
3. It Creates Alignment
The seller has continued financial exposure to the business.
4. It Can Help Buyers
The buyer may reduce the amount of cash required at closing.
5. It Doesn’t Eliminate Risk
Debt still has to be repaid.
6. The Seller May Want Security
Expect negotiation around collateral and guarantees.
7. Interest Matters
A seller note isn’t simply delayed payment.
8. Terms Matter
Length, interest, amortization and balloon payments all matter.
9. SBA Rules Matter
When combined with SBA financing, the structure must comply with applicable requirements.
10. Get Professional Advice
Have your attorney and CPA review the structure.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 476 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential. He is also a Florida Licensed Real Estate Broker and Business Brokers of Florida Board Certified Intermediary . Shea is a member of the VRMA and a recognized expert in property management and vacation rental management business sales