Seller Financing

DefinitionSeller financing is when the seller of a business accepts part of the purchase price as a loan repaid by the buyer over time, rather than all cash at closing. It is common in small-business acquisitions because it bridges valuation gaps, widens the buyer pool, and signals the seller’s own confidence in the business — a seller willing to be paid out of future earnings is telling the buyer those earnings are real. Terms typically cover ten to thirty percent of the price over three to seven years.