Appreciate the tag @redacted‌. Interesting topic, you’re basically talking about deferred purchase price vs pure seller financing. In the SMB deals I’ve seen, a structure like 80% at close, 20% within 60–90 days usually shows up in cases where: • the buyer wants a little short‑term working capital breathing room right after close, and • the seller is comfortable that the bank/SBA funds plus their note already cover most of their economics. From my experience, these aren’t common per se, but at the same time I wouldn’t really call them out as being unusual either. Here are a few patterns I’ve seen work in practice: • Staged cash at close with 70% at closing, 10% at day‑90, and 20% as a seller note over 3–5 years. The day‑90 payment was only tied to there being no major problems (MAE) or fraud, rather than to how the business performed. • Temporary bridge to refi where the buyer closes with a higher seller note. The buyer then uses a refi or term loan 6–12 months later, to take the seller out, effectively becoming a deferred purchase price that’s funded later. • a Short “stub” holdback with 5–10% deferred, and 90–180 days to cover the working capital true‑up or specific closing adjustments. This one is typically more common in asset‑heavy or seasonal businesses. The big things I watch for on the buy‑side are: • that the deferred piece is clearly documented as part of total purchase price (not an earn‑out in disguise), • that covenants and default triggers match the reality of the first 6–12 months of ops, and • that the schedule doesn’t accidentally blow up your DSCR or SBA covenants.

^redacted‌ covered the structural patterns well. Adding a buy-side diligence angle that's worth flagging since you mentioned working capital flexibility specifically: If your deferred payment is sized around working capital needs in the first 90 days, the quality of your NWC peg matters enormously. I see this miscalibrated all the time on SMB deals. The seller's working capital looks fine on the balance sheet at signing, then you close and discover the AR is older than represented, a chunk of it isn't collectible, and inventory includes stale items that need to be written down. Suddenly your "working capital flexibility" is funding actual gaps, not transition timing. Two specific things to lock down before you build a deferred structure around WC needs: - A real NWC peg based on a trailing 12-month average, not a point-in-time snapshot. Seasonal businesses especially. The seller's "normal" working capital and your post-close reality can differ meaningfully. - AR aging and collectibility tested, not just summarized. Anything over 60 days should be assumed at risk until proven otherwise. Inventory tested for obsolescence. If your QoE or financial diligence work hasn't pressure-tested these, the deferred 20% may end up being the difference between a smooth transition and a cash crunch in month two. Worth scoping into your diligence before you finalize the structure. The structure itself is fine. The assumptions behind the sizing are where deals get bumpy.