Does any have experience speaking to sellers about owner financing?

by a searcher from East Carolina University

3 years ago

The subject of owner financing to some sellers is a non starter.  However, when i have mentioned to an owner that they could carry a note, later in my conversations, the seller considers it.  Does any have experience speaking to sellers about owner financing?  Perhaps a successful approach to the subject?

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investor from Illinois Institute of Technology

A seller note will also allow the seller to defer taxes due on receipt of consideration.
As market interest rates are very low, a seller note having an interest 200-300bp above market will be attractive.

3 years ago | like reply | 2 likes

intermediary from Naval Postgraduate School

As a Sell-side intermediary, we always coach our clients to expect that they will have to provide a seller note. We tell them that in order for a Buyer to get SBA financing, a seller note will most likely be required. We also tell them that if they won't participate with a seller note, the size of the buyer market is much smaller and a lower price should be expected. As a potential buyer, you can always say that your banker has indicated that this is the norm because they want the seller to stay involved so as to protect their investment (at least for a year). We also advise our clients that the size of the note should not exceed 10% of the selling price and in no case should their note be larger than the buyer's personal cash contribution to the deal structure.

3 years ago | like reply | 3 likes

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