In a seller-financed deal, the seller acts like a lender for part of the purchase price. You pay a down payment, then pay the rest to the seller over time, usually with interest.
Why sellers agree
- It can widen the pool of buyers and help the deal close.
- It can support a higher price.
- Interest gives the seller a steady return.
Why buyers like it
- Less cash needed up front.
- It keeps the seller invested in a smooth handover.
- Lenders often see it as a positive sign.
What to negotiate
- Amount: how much of the price the seller carries.
- Interest rate and term: what you will pay and for how long.
- Security: what the seller can claim if payments are missed.
- Standby terms: whether payments wait behind a bank loan.
- Offset rights: whether you can reduce payments if the seller’s claims about the business turn out to be untrue.
Risks
You still owe the money if the business struggles, and a badly written agreement can cause disputes. Have a lawyer draft it.
Need financing?
Answer a few questions and we will look for funders and investors that fit.
This article is general education, not financial, legal or tax advice. Talk to a qualified accountant and lawyer before you buy, sell or invest.