Seller financing is one of those things that sounds either brilliant or terrifying, depending on who you ask. Some sellers love it. Others swear they’d never touch it. And buyers? They’ll ask for it whenever they can.

So what’s the truth?
Here’s what you need to know — and how to decide if it belongs in your deal.

What is Seller Financing?

In plain terms: you, the seller, agree to finance part of the deal. Instead of the buyer paying 100% upfront, they pay a portion now — and the rest over time, usually with interest.

You're basically acting like a private lender.
You get a promissory note. They get your business. You both walk a little closer to the middle.

Why Sellers Might Say Yes

1. It Makes the Deal Happen

Sometimes seller financing is the bridge between a dead deal and a done one. If a buyer is strong operationally but light on capital, a well-structured seller note can unlock the transaction.

2. Higher Overall Price

Buyers are often willing to pay more if they don’t have to come up with all the cash upfront. Seller financing can justify a higher valuation.

3. Passive Income Stream

You’re basically earning interest on your exit. For some sellers, a multi-year payout with monthly checks beats a lump sum.

Why Sellers Should Be Cautious

1. You’re Taking on Risk

Let’s be blunt: you’re trusting someone else to run your business well enough to pay you back. If they fail, your money might not come.

2. You’re Still Emotionally Attached

Seller financing often leads to ongoing communication post-close. Some sellers find that stressful, especially if the buyer changes things they built.

3. You Might Become the Bank

If the buyer falls behind on payments, you could end up chasing money, renegotiating, or — in worst-case scenarios — trying to reclaim the business.

Why Buyers Love It

• Less cash upfront = more deals possible
• They often avoid expensive commercial lending
• It signals the seller has confidence in the business post-sale

When Seller Financing Makes Sense

When to Avoid it

How to Structure It Right

If you’re going to offer seller financing, protect yourself:

• Use a solid promissory note (principal, interest, timeline, default terms)
• Get collateral when possible (personal guarantees, liens, etc.)
• Outline what happens if payments are late or missed
• Tie it to metrics if needed (e.g. minimum revenue to trigger payment)

And most importantly: have a good M&A advisor and attorney in your corner. This isn’t a handshake deal — it’s a contract with real consequences.

Final Word

Seller financing isn’t good or bad. It’s a tool.
In the right deal, with the right structure, it can unlock more value, create alignment, and get things across the finish line.

But if done blindly — or with the wrong buyer — it can become a mess.

At Exits + Acquisitions, we’ve structured seller financing deals that worked brilliantly. We’ve also walked away from deals where the risk wasn’t worth it. The key is knowing the difference.

Need help evaluating a deal structure? Let’s talk. Confidentially. No pressure.