When a seller offers financing to the buyer?
Mia Ramsey
Published May 17, 2026
In seller financing, the seller takes on the role of the lender. Instead of giving cash to the buyer, the seller extends enough credit to the buyer for the purchase price of the home, minus any down payment. The buyer and seller sign a promissory note (which contains the terms of the loan).
How seller financing works in a business purchase?
Also known as owner financing or seller carryback, seller financing involves the business’s seller essentially acting as a bank. The seller offers a loan to buyers that covers a portion (or all) of the total purchase price of their business. In turn, buyers repay the seller in installments, with interest.
Why is it important to sell your business with seller financing?
That way, if the buyer defaults on the contract then the seller can obtain ownership over the buyer’s house in addition to reclaiming their business entity and capital assets. The biggest reason why a business owner would sell their company with seller financing is because it greatly increases their chances of finding a buyer.
Can a buyer pressure you into a seller financing deal?
Often times, buyers will pressure the owner into giving them a seller financing deal because they show a true interest in purchasing their business. But you should never feel pressured into agreeing to any kind of deal where your business is concerned. If the buyer tries to pressure you, then say forget it and try someone else.
How can I Sell my Business to a buyer?
There is no actual entity to sell and transfer over to the buyer. You will only be able to seller finance the intellectual property, vehicles, real estate, and equipment of the business. Since all these assets will be in your name anyway, you can create a simple purchase agreement between you and the buyer.
How much down payment do I need to sell my business?
But just to ensure that the buyer is serious, don’t give them 100% seller financing. You should always require a down payment of at least 30% of the total asking price. Then you can seller finance the other 70% to the buyer.
