We are in deep negotiations of a seller-financed LOI. Its a $3+MM EBITDA, $12MM asking price manufacturing opportunity. The seller is holding a note for most (if not all) of the asking price because of his specific capital gains situation. However, he is concerned about being the majority lien holder and have a bank in front. So, how do we address any future situation requiring a bank loan such as future equipment purchase or LOC, prior to the seller note being paid out? In that case, I am assuming the bank (even with a smaller amount than the seller note) becomes senior to the sellers note, true? Is there a way to get around this to satisfy the seller's concern? Thank for any thoughts on this.
Question re: Structuring a seller financed deal
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