How do you ask a seller to finance part of the deal?

Why is the ask harder than buyers expect?

The data shows a gap between what buyers want and what sellers give. As of October 2026:

• 61% of buyers in a BizBuySell survey want seller financing.
• 20.4% of US listings offer it.
• In closed deals, the IBBA reports sellers took 83% to 92% of deal value in cash at closing, and seller financing was under 10% of deal value.

Most sellers want cash. A note asks them to keep risk in a business they no longer control. Your job is to show why the note is worth that risk to them, not to you.

How should you frame the request?

Frame the note around the seller's goals. Retirement is the top reason owners sell, per the IBBA's Q2 2026 Market Pulse: 45% of sellers in deals under $500,000 and up to 72% in $1 million to $2 million deals. A retiring owner usually cares about three things: total proceeds, steady income and seeing the business and staff land well.

1. Ask in the LOI, not after. A note introduced after the seller has agreed to a price feels like a retrade. Put the structure in your first written offer.
2. Lead with the seller's benefit. A note can support a higher price than an all-cash offer, and it pays interest. Say so plainly.
3. Explain the bank's view. If you are using an SBA loan, the lender will test whether cash flow covers all debt at least 1.25x. A note with a longer term or on standby can be what makes the deal financeable at the seller's price.
4. Connect it to the transition. Under SBA rules the seller can stay on as a consultant or employee for up to 24 months after closing. A seller with a note has a reason to make the handoff work.
5. Offer protection. A lien on business assets behind the bank, your personal guarantee on the note, regular financial reports and clear default terms. These make the note safer without changing its economics.
6. Point to the tax question, not the answer. Payments over time can allow installment-sale reporting, where gain is recognized as principal is received. Suggest the seller ask their CPA what it means for them. Do not promise a tax result.

What does the conversation sound like?

A plain version, for a seller who has told you they are retiring:

"I can offer $1,000,000. I would pay $850,000 at closing and ask you to carry $150,000 as a note at 7% over five years. That gives you about $2,970 a month after closing, and over the five years you would receive about $1,028,000 in total. My best all-cash offer is $900,000. The bank needs the note so the loan covers comfortably. I will secure it with the business assets and my personal guarantee, and I will send you quarterly financials. Your CPA can tell you how the timing of payments affects your taxes."

That script does four things. It gives a number. It compares the note with the cash alternative. It explains why. And it offers security. It does not pressure, and it does not claim a tax benefit.

Worked example: the seller's side of the math

The two offers in the script above, laid out the way a seller would compare them. The figures are illustrative.

1. Offer A, all cash: $900,000 at closing.
2. Offer B: $1,000,000 price, $850,000 at closing, $150,000 note.
3. Note terms: 7% interest (the median stated in listings that offer financing), 60 monthly payments. Monthly payment: $2,970.18.
4. Total paid on the note: $2,970.18 × 60 = $178,211, of which $28,211 is interest.
5. Total seller receives under Offer B: $850,000 + $178,211 = $1,028,211.
6. Difference versus Offer A: $1,028,211 − $900,000 = $128,211 more, received over five years, with the risk that you fail to pay.

If the deal uses an SBA loan and you want the note to count toward your equity injection, the ask changes. Suppose total project costs, meaning price plus working capital, fees and closing costs, are $1,100,000. The 10% injection is $110,000. A note on full standby can cover no more than half of that, $55,000, together with any other limited sources. Full standby means the seller receives no principal or interest for the life of the SBA loan. That is a much harder conversation, and the next article covers it.

Do not offer an earnout as a substitute in an SBA deal. SBA rules prohibit seller earnouts in SBA-financed acquisitions.

Where these numbers come from: Buyer demand is from BizBuySell. Listing share and median terms are from BigIdeasDB. Retirement and cash-at-close data are from the IBBA Market Pulse Q2 2026. SBA standby, coverage, consulting and earnout rules are from SOP 50 10 8.1 as summarized by Beancount and Cantrell Firm. Payments are standard amortization arithmetic. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling and these are secondary summaries, so confirm current terms with your SBA lender.

Related questions

What if the seller says no?

Ask what would make it acceptable: a shorter term, a higher rate, more security or a smaller note. If the answer is still no, decide whether the deal works with cash and bank debt alone. Many good deals close with little or no seller financing.

Should the broker be in the conversation?

The broker represents the seller and is usually paid from the seller's proceeds. Put the request in writing through the broker, and ask to walk the seller through the numbers directly. A financeable structure serves the broker too, because the commission is paid only if the deal closes.

Does asking for a note signal that I am underfunded?

It can, if you lead with it. Show proof of funds and lender interest first. Then present the note as a choice about structure, not a need.

Can I ask for a note after due diligence finds problems?

Yes, and it is a legitimate response to findings. Converting part of the price into a note, with offset rights, is one way to share risk you discovered. Tie the request to specific findings.

What comes next

If your lender needs the note to count toward your injection, the seller has to agree to full standby. See what a full-standby seller note is and why sellers resist it. Buyers who plan to keep acquiring should also build a relationship with the seller that survives closing, because a seller who knows the industry can introduce you to the next owner thinking about selling.

Related articles

• What are typical seller note terms?
• How does seller financing work when you buy a business?
• What is a full-standby seller note, and why do sellers resist it?
• Why would anyone sell a profitable business?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.