I know keyman or customer concentration risks are major red flags but there are some good potential businesses that still have some degree of one of these two risks. What are some ways for structuring seller notes to mitigate these risks?
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If you are using SBA financing and you have a forgivable note, in order for the full note payment not to count against debt service it needs to be on standby for 2-years. The note also has to have a standard repayment provision for the full loan amount, although the amount of that payment can always be reduced in the future based on the performance metrics built into the note. If you would like to discuss seller notes in more detail, you can reach me at any time here or at --@----.com Good luck structuring the note.