Deal Structure for Seller's Note

by a searcher from University of Pennsylvania - The Wharton School

4 years ago

We're looking at a couple of deals where the seller is willing to hold a small note. These are smaller acquisitions ($1M EBITDA), and we want to use SBA thus we want the seller to hold as big of a note as possible.

Can you share any deal structure or negotiation strategies that have worked for you in the past to get the seller to hold a larger financing note?

thank you!

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searcher from University of Pennsylvania - The Wharton School

Another use of seller notes is to bridge the gap between what they think their business is worth and what you think it is worth. I use contingent notes that deliver more if the seller is correct and much less if they are not. It is very useful to help close a deal that the bid and ask are too far apart.

3 years ago | like reply | 0 likes

intermediary from Wake Forest University - Schools of Business

Thanks ^Searchfunder member‌ -- I learned this first hand from a transaction that Live Oak financed for a one of my sellers last year!

4 years ago | like reply | 1 like

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