Hi All,

I'm in negotiations for a business right now that is 80% seller financed. Since there isn't a bank involved or other hard assets, the seller is asking for collateral to hold against the seller financing. I'm a little unfamiliar how this typically works in business acquisition given that collateral isn't exactly the same as a personal guarantee.

Can anyone explain how collateral is different than a personal guarantee?

Is it possible to use a retirement Roth IRA as collateral? Or is it basically constrained to real estate, high-value items (i.e. cars), and cash?