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What Is Seller Financing in a Business Sale?

A plain-English answer, and why it matters when you actually sell.

Short answer: Seller financing, also called a seller note, is when the owner selling a business lets the buyer pay part of the price over time instead of all in cash at closing. The seller effectively acts as a lender for a portion of the deal, at an agreed interest rate and term. It widens the buyer pool and signals the seller's confidence that the business will keep performing.

Why Seller Financing matters when you sell

Seller financing is common in small-business sales, especially when a buyer uses SBA financing that expects the seller to hold a note. From the seller's side it can close deals that would otherwise stall, command a slightly higher total price, and produce interest income. The trade-off is risk: you are carrying paper, so the buyer's ability to run the business well matters to you even after you leave.

The terms that protect you are the down payment size, interest rate, term length, personal guarantee, and security over the business assets. WETYR structures seller notes so the risk is priced and secured, not just given away to get a deal done.

Frequently asked questions

Do I have to offer seller financing?
No, but offering a reasonable seller note widens your buyer pool and can raise your total price, particularly for SBA-financed buyers who expect the seller to hold a portion.
How much of the price is usually seller-financed?
Often 10 to 30 percent, with the rest cash at close from the buyer's equity and bank or SBA financing. The exact split depends on deal size and buyer type.
Is seller financing risky?
It carries collection risk, so structure matters: a solid down payment, a personal guarantee, security over the assets, and a buyer who can actually operate the business all reduce the risk.

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