Seller Financing
A portion of the financing for a typical Main Street transaction commonly comes from the business seller. We refer to this form of financing as “seller held notes" or "seller paper”. The amount and terms of seller financing agreements vary significantly depending on the nature of the business being sold, the general availability of third party financing, the buyer’s cash down payment and various other factors. The willingness of a seller to provide some financing is also an important psychological factor for some buyers in that it can be interpreted by buyers as a demonstration of the seller's confidence in the future prospects of the business being sold. While the interest rate on "seller held notes" varies, we usually see rates of 6% to 10%, depending upon prevailing interest rates, and the expected repayment period.
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