Tell an owner that the buyer wants them to carry part of the price, and the first reaction is usually suspicion — if the deal were any good, wouldn't the buyer just pay? After more than three decades owning businesses and years spent selling them, I can tell you a seller note is one of the most normal features of a small-business sale, not a warning about it. In deals this size it is closer to the rule than the exception, and understanding why can turn something owners fear into something that works in their favor.
1. A seller note is standard, not a red flag
In the small and mid-sized market, most transactions include the seller carrying some portion of the price — commonly in the range of 10% to 30% — as a note paid over a few years after closing. This is not a sign the buyer cannot afford the business or that something is wrong with it. It is simply how deals of this size get financed. Full cash at closing, with a bank covering everything, is the exception, not the norm. Once you know that going in, the buyer's request stops looking like a lack of faith and starts looking like the market working the way it usually does.
2. Why buyers — and their lenders — want it
Two forces push toward seller financing. The first is the lender. Many smaller deals are funded with an SBA-backed loan, and those lenders frequently require the seller to hold a note precisely because it keeps the seller invested in the handover going well. The second is alignment: a buyer paying you over time wants reassurance that the business will perform the way you described, and your willingness to carry a note is the most convincing evidence you can give that you believe it will. The buyers I talk to around the Triangle read a seller's flat refusal to hold any note as a quiet signal — and rarely a reassuring one.
3. It can raise your total price, not just delay it
Owners fixate on cash at closing, but the terms and the total are connected. A seller willing to carry a reasonable note is often able to command a higher overall price, because the financing itself is worth something to the buyer and you are the one providing it. A note also carries interest, so the dollars you defer are not sitting idle — they earn while you wait. Handled well, seller financing is not you giving something up; it is you widening the pool of buyers who can afford your business and getting paid for the flexibility.
4. Structure it so you actually get paid
Carrying a note is reasonable; carrying an unsecured, unprotected one is not. The terms are where an experienced advisor earns their keep. You want a fair interest rate, a sensible term, and — this is the part owners overlook — security: a lien on the business assets, a personal guarantee from the buyer, and the right to step back in if the payments stop. Structured properly, a seller note is a protected, interest-bearing asset. Structured carelessly, it is a hope. The difference lives entirely in the paperwork you agree to before closing.
5. When to push back
None of this means you accept whatever the buyer proposes. If a buyer wants you to finance most of the purchase, that tells you something about their capital and their commitment, and it is fair to ask hard questions. A note should be a bridge across a reasonable gap, not the whole span. The healthy version is a buyer bringing real money to the table — their own equity and a bank behind them — and asking you to carry a sensible slice. When the balance tips too far toward the seller, the right move is not to walk away automatically, but to slow down and understand exactly who you are being asked to trust.
The takeaway
Seller financing is not a concession you make on a weak deal; it is how most small businesses change hands, and it can lift your total price while opening the door to more qualified buyers. The question is never simply whether to carry a note — it is how much, on what terms, and with what protection. Get the structure right, secure it properly, and a seller note becomes what it should be: a fair, interest-bearing part of a good deal, not a risk you took on blind.
