Why Seller Financing Can Be Awesome (and Not as Scary as It Sounds)
If you’ve ever thought about selling your business, you’ve probably heard the term “seller financing” tossed around—and maybe you immediately thought, “Yeah, that’s not for me.” Totally understandable. On the surface, it sounds risky. Like… you sell your business, but don’t get all the money upfront? Why would anyone do that?
Well, turns out, seller financing can actually be a pretty sweet deal—for both sides. And no, it doesn’t mean you’re just handing over the keys and hoping you get paid later. When done right, it’s a smart, strategic way to get your business sold and get paid in the process.
What Is Seller Financing, Exactly?
Seller financing is when you, the business owner, act kind of like the bank. The buyer pays a portion of the price upfront (usually 10% to 30%), and the rest over time—monthly or quarterly payments, kind of like a loan. There’s usually interest involved too, so yep, you’re actually making money off that deal.
So Why Would You Do That?
1. It Makes Your Business Easier to Sell
A lot of buyers want to buy a business… but don’t have all the cash. Banks aren’t always super helpful either, especially for small business deals. By offering seller financing, you’re opening the door to more serious buyers who couldn’t otherwise swing it. It’s like saying, “Hey, I believe in this business enough to bet on it with you.”
2. You Can Get a Higher Sale Price
Here’s a cool bonus: when you offer seller financing, buyers are often willing to pay a little more overall. Why? Because you’re giving them flexible terms, and that convenience can be worth it. So even though you’re waiting longer to get all your money, you might actually walk away with more in the end.
3. Earn Interest (a Little Extra Cash for You)
Since you’re basically acting like the lender, you can charge interest—just like a bank would. That means you’re not just getting your sale price, you’re getting some bonus income on top of it. Kind of like your business paying you even after you’ve walked away.
4. You Stay in the Loop (But Not Too Much)
Seller financing often comes with a bit of a transition period where you help the new owner get settled. This isn’t about micromanaging—it’s about making sure things go smoothly so you do get paid. And honestly, it can feel good to know your business is in good hands.
Okay, But What’s the Catch?
Like anything, seller financing isn’t without risk. If the buyer totally drops the ball and can’t make payments, you might have to get lawyers involved or even take the business back (yes, that’s a thing). That’s why it's super important to vet your buyer, get everything in writing, and work with a solid attorney or broker.
Final Thoughts
Seller financing isn’t for everyone, but it’s not nearly as risky or complicated as it might seem at first glance. If you want to sell your business faster, attract better buyers, and maybe even make more money in the long run, it’s definitely worth considering.
Just think of it as your business giving you one last gift—some nice, steady payments while you sip coffee (or margaritas) in your next chapter. Not a bad way to ride off into the sunset, right?