Seller financing

by a searcher from Columbia University - Columbia Business School

3 years ago

How Is Seller Financing Usually Secured? Currently negotiating a deal with 50% seller financing. Does it require a PG just like a traditional lender or secured based on assets of the business? What's a typical structure?

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searcher from New York University - Leonard N. Stern School of Business

Try to secure seller financing with assets or equity in the business. The seller may be willing to do this if they are eager to sell or if they can secure a higher price by offering attractive seller financing.

3 years ago | like reply | 0 likes

intermediary from Indiana University at Bloomington

IF you can avoid it, great but as Ron states if I was the seller, then I would want it. My clients usually have to guaranty less than 1/4 of the time. If it is SBA, then you can usually finance most of the loan amount, if not all (90% with 10% down), always good to have some note in there though. As the % of Seller Note goes up then the PG % goes up. Some of it depends on the buyer, if there is little to no liquidity of the buyer, then the seller may only want the Company to guarantee with some protections on excessive distributions or salary.

3 years ago | like reply | 0 likes

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