Deal Structure

Seller Financing

When the seller agrees to receive part of the purchase price over time instead of all in cash at closing. The seller essentially loans the buyer a portion of the price, often in the form of a seller note that the buyer pays back with interest. Why it matters: Seller financing can help close a deal when a buyer cannot or will not pay the full price upfront, and it is common in SBA-backed and main street deals. It also means the seller carries some repayment risk, so the rate, term, security, and any standby requirements from the senior lender all matter to the seller's real proceeds.

Related terms

Purchase Price
The amount the buyer agrees to pay for the business. Why it matters: Purchase price only tells part of the story; timing of payment, seller notes, earnouts, rollover equity, escrows, and taxes can change the real value of the offer.
Seller Note
A loan from the seller to the buyer. The buyer pays part of the price over time. Why it matters: A seller note can help a buyer finance the deal, but it means the seller is taking repayment risk after closing.
Closing
The moment when the sale officially happens and ownership transfers. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.
Seller
The current business owner who wants to sell the business. Why it matters: The seller is not just handing over ownership; they are also proving the business, answering diligence requests, negotiating risk allocation, and often helping with transition.
Lender
A bank or financing company that provides debt. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.
Buyer
The person, company, investor, or fund trying to buy the business. Why it matters: Different buyers value different things, so knowing the buyer type helps an owner understand likely questions, risks, financing needs, and negotiation style.

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