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Do You Have A Seller Financed Business For Sale? - Part 2

Selling And Walking Away From Business


By Robert Duplicki      June 9, 2023

If you own a business, you might be asked the question "Do you have a seller financed business for sale?" Selling a business has many moving parts, hopefully not as many as the puzzle above. Seller financing can provide advantages in the sales process, and it will help you to have conversations with key people about seller financing. Reading Do You Have A Seller Financed Business For Sale? - Part 1, shares many insights such conversations could provide. This article will help you deal with more of the puzzle pieces.

Of course, no one may actually ask you the exact question "Do you have a seller financed business for sale?" Some people that know you may wonder if you have plans to sell your business. A potential buyer is probably most likely to ask you if your business is for sale. And it's also likely that they would follow up with the question "Will you provide seller financing?" Since most small businesses are sold using seller financing, you should be prepared. Perhaps you should be the one initiating the conversations suggested in this article and Part 1. In this article and others on this website, you will find many ideas that could be used to sell other assets using seller financing.

Let's assume the answer is yes, that you do have a seller financed business for sale. What might the following conversations be like?

What will the conversation be like with your family?

A conversation with your family on this topic could vary substantially based on your personal circumstances. Your family might not know anything about seller financing or certain members may know a lot. They may or may not be in favor of you seling the business. They may have some negative preconceived notions about seller financing. Up to that point, they may or may not have had much involvement with your business. The more you learn about seller financing, the easier it will be to have these conversations. If you can proceed with confidence, it will help you get support from your family for your plans.

What might a financial advisor offer in response if you have a seller financed business for sale?

As a financial advisor, the response to a business seller who has a seller financed business for sale would depend on various factors, including the specific details of the business, the seller financing arrangements, and the seller's financial goals and risk tolerance. Here are some potential services that a financial advisor may provide to help the business seller:

  • Analyzing the Investment Opportunity: The financial advisor may conduct a thorough analysis of the business's financial performance, growth prospects, and market conditions to assess the timing of selling the business and using seller financing to do so. This may involve reviewing financial statements, tax returns, industry data, and conducting a business valuation to determine the business's fair market value. The seller could use this input to develop their strategy to sell the business

  • Assessing Risks and Rewards: The financial advisor may discuss the risks associated with seller financing, such as credit risk, interest rate risk, and potential default by the buyer. They may also highlight the potential rewards, such as tax benefits, higher returns compared to traditional investments, the opportunity to diversify investment portfolios, and the ability to earn interest income over the term of the note.

  • Evaluating Proposed Seller Financing Arrangements: The financial advisor may review the terms of the seller financing arrangements, including down payment, interest rate, repayment schedule, and creditworthiness of the buyer. They may assess the risks and rewards of the seller financing arrangements and provide insights on the potential impact on the seller's financial objectives.

  • Discussing Alternative Financing: The financial advisor may explore alternative options for the business seller, such as traditional financing methods, suggest that other buyers be considered, or that you negotiate different financing terms to mitigate risks and enhance the value of the sale.

  • Point Person For The Transaction: As with some of the other professionals you deal with, your financial advisor may offer to take the lead in coordinating the efforts of all the people you rely on to sell your business. Depending on your specific circulmstances, this is an opprtunity to "interview" your financial advisor for that job. They may also recommend other professionals for you to hire

  • Future Planning: The financial advsior should be familiar with the seller's financial objectives moving forward. So that should be a key part of your conversation, as you consider selling your business using seller financing. What is the expected return to you from the sale, and how will you use those funds moving forward.

What might an attorney offer in response to help the business seller?

As an attorney, a potential response to help a business seller who has a seller financed business for sale could involve providing legal advice and guidance on structuring the seller financing arrangement to protect the seller's interests. This article gives you the chance to think about such a conversation, and develop questions that you could ask. How would you prioritze the initial issues, and what answers could you find online instead? Here are some potential services that an attorney could provide to a business seller:

  • Legal Compliance: An attorney can ensure that the seller financing arrangement complies with all applicable laws and regulations, including state and federal lending laws, securities laws, and tax laws. This can help the seller avoid any legal pitfalls or liabilities associated with the seller financing transaction.

  • Documentation and Contractual Protection: An attorney can draft or review the seller financing agreement and other relevant documents to ensure that the seller's rights and interests are adequately protected.

  • Risk Mitigation: An attorney can advise the seller on potential risks associated with seller financing, and help devise strategies to mitigate those risks. This may involve conducting due diligence on the buyer's financials, creditworthiness, and business plans, and incorporating appropriate safeguards and protections in the financing agreement.

  • Negotiation and Dispute Resolution: An attorney can represent the seller in negotiations with the buyer to ensure that the seller's interests are well-represented and protected. In case of any disputes or issues arising during the seller financing arrangement, an attorney can provide legal advice and representation to resolve such disputes through negotiation, mediation, arbitration, or litigation, if necessary.

  • Legal Rights and Remedies: An attorney can advise the seller on their legal rights and remedies in case of buyer default or breach of the seller financing agreement. This may include options for enforcing the seller's rights, such as repossession of collateral, foreclosure, or other legal actions to recover the outstanding balance or secure the seller's interests.

  • Tax Implications: An attorney can provide guidance on the tax implications of seller financing, such as capital gains tax, interest income, or other tax considerations. This can help the seller understand the tax implications of the seller financing arrangement and make informed decisions.

How would a title company respond to help the business seller?

Overall, the title company's role is to facilitate a smooth and efficient title transfer process, ensure that the seller's interests are protected, and provide expert guidance and assistance to help the business seller successfully complete the sale of their seller financed business. Consider the services below and think about the questions and comments that you could discuss:

  • Ensure Title Clearance: The title company conducts a thorough examination of the property's title to ensure that it is free from any encumbrances, liens, or other title defects that could impact the sale of the business. As needed, they may work with the seller to resolve any title issues that arise during the title search process to ensure a clear and marketable title can be conveyed to the buyer.

  • Facilitate The Closing Process: The title company may guide the business seller through the closing process, which typically involves preparing and reviewing legal documents, coordinating with all parties involved in the transaction, and ensuring that all required, notarized signatures are obtained. They can assist in coordinating the disbursement of funds and recording of the sale transaction with the appropriate government agencies.

  • Offer Escrow Services: The title company may provide escrow services to facilitate the seller financing arrangement. This involves holding funds from the buyer and disbursing them to the seller according to the agreed-upon terms and conditions of the seller financing agreement. The title company may also monitor and enforce compliance with the seller financing terms, such as verifying timely payments and maintaining proper records.

  • Provide Regulatory Guidance: The title company may offer guidance on legal and regulatory considerations related to the title transfer process, including compliance with local, state, and federal laws and regulations. They may also work closely with the seller's legal or financial advisors to ensure that the transaction is conducted in accordance with applicable laws and regulations.

  • Provide Title Insurance: The title company should offer title insurance to protect the business seller's interests in the event of any unforeseen title defects or claims that may arise after the sale. Title insurance provides financial protection and peace of mind to the parties involved in the transaction, including the business seller, by covering the costs of defending against any valid claims or compensating for any losses incurred due to title issues.

  • Provide Responsive Customer Service: The title company should provide responsive and reliable customer service to the business seller throughout the title transfer process. This involves promptly addressing any questions or concerns, keeping the seller informed of the progress of the transaction, and offering professional and courteous assistance at every step of the process.

What could a security company say in response to help the business seller?

A security company can play a vital role in helping the business seller safeguard their business, assets, and interests during the sales process, ensuring a smooth and secure transaction. Listed below are potential services that a security company could provide to help a business seller. The nature of your conversation will depend on whether you currently utilize a security company, and whether you are speaking with them or another company. What would you hope to achieve by talking with them?

  • Risk Assessment: A security company may conduct a comprehensive risk assessment of the business premises to identify any vulnerabilities or weaknesses that could pose a security risk during the sales process. This assessment may include evaluating access control measures, alarm systems, surveillance cameras, and other security protocols to ensure they are up-to-date and functioning properly.

  • Security Protocol Review: The security company may review the existing security protocols of the business and provide recommendations on how to enhance security measures during the sales process. This may include reviewing and updating access control procedures, alarm codes, surveillance camera coverage, and other security measures to ensure they are aligned with the changing dynamics of the business sale.

  • Employee Training: The security company may provide training sessions for the business seller's employees to educate them on security best practices during the sales process. This may include training on how to identify and report suspicious activities, maintain confidentiality, and follow proper security protocols to protect the business and its assets.

  • Background Checks: The security company may conduct background checks on potential buyers or other parties involved in the business sale to ensure they do not have any prior criminal history or pose a security risk to the business. This can help the business seller make informed decisions when dealing with potential buyers or other parties involved in the sales process.

  • Security Monitoring: The security company may provide 24/7 monitoring of the business premises during the sales process, including surveillance camera monitoring, alarm monitoring, and other security measures to detect and respond to any potential security breaches or incidents promptly.

  • Emergency Response Planning: The security company may assist the business seller in developing or updating an emergency response plan that outlines procedures for dealing with security incidents or other emergencies during the sales process. This may include coordinating with local law enforcement, emergency services, or other relevant stakeholders to ensure a swift and coordinated response in case of any security concerns.

  • Ongoing Support: The security company may provide ongoing support and guidance to the business seller throughout the sales process, offering expertise and advice on security matters as needed. They may also be available to address any security concerns or incidents that may arise during the sales process and provide prompt assistance and resolution.

How could your employees respond to help you as you sell your business?

Employees can be valuable allies in helping a business owner during the process of selling their business. As their employer, how could you facilitate this process? Here are some potential responses that employees could provide to help the business seller:

  • Confidentiality: Employees can maintain strict confidentiality regarding the business sale process and not disclose any sensitive information to outsiders, including potential buyers or competitors. This can help protect the business's value and prevent any disruption during the sale process.

  • Supportive Communication: Employees can communicate positively and professionally with potential buyers and other stakeholders, providing accurate information about the business and its operations. This can help create a favorable impression and instill confidence in potential buyers.

  • Business Knowledge: Employees can share their knowledge and expertise about the business with potential buyers, providing insights into the operations, customer base, products/services, and other relevant aspects. This can help potential buyers better understand the business and its potential, leading to more informed decision-making.

  • Employee Retention: Employees can express their willingness to stay on with the business and support the new owner, which can be reassuring to potential buyers. This can help ensure continuity of operations and customer relationships, which can be an attractive factor for potential buyers.

  • Professionalism: Employees can continue to perform their job duties in a professional and diligent manner, maintaining productivity and quality standards during the sale process. This can help demonstrate to potential buyers that the business has a capable and committed workforce.

  • Flexibility: Employees can be open to changes and adaptations during the sale process, such as accommodating potential buyer requests for information or site visits, adjusting work schedules or tasks as needed, and being cooperative with the business seller and potential buyers throughout the process.

  • Positive Testimonials: Employees can provide testimonials or references to potential buyers, speaking positively about their experience working for the business and expressing confidence in its future success under new ownership. This can help reinforce the business's value proposition and build trust with potential buyers.

  • Support for the Business Seller: Employees can provide emotional support to the business seller during the often complex and emotional process of selling a business. This can include showing empathy, understanding, and patience as the business seller navigates the various stages of the sale process.

How would suppliers respond to help the business seller?

Suppliers can play a crucial role in the sale of a business and may offer support or assistance to the business seller in various ways, including:

  • Favorable Terms: Suppliers may be willing to offer favorable terms, such as extended payment terms, discounted pricing, or special incentives to the business seller or potential buyers to help facilitate the sale of the business. This can make the business more attractive to potential buyers and increase the likelihood of a successful sale.

  • Continuing Supply: Suppliers may assure the business seller and potential buyers of their commitment to continuing to supply goods or services to the business even after the sale, which can provide reassurance and stability to potential buyers.

  • References or Testimonials: Suppliers may be willing to provide positive references or testimonials to potential buyers, highlighting the strong relationship they have had with the business seller and the quality of the business's operations. This can help reinforce the credibility and reliability of the business in the eyes of potential buyers.

  • Information and Data: Suppliers may provide valuable information and data to the business seller, such as industry trends, market insights, or customer preferences, which can be useful in preparing the business for sale and positioning it effectively to potential buyers.

  • Flexibility and Support: Suppliers may offer flexibility and support during the transition period, such as adjusting delivery schedules, accommodating changes in orders or specifications, or providing technical support, to ensure a smooth transition for the business seller and potential buyers.

  • Referral or Introductions: Suppliers may refer potential buyers or introduce them to the business seller, especially if they have existing business relationships or partnerships that could benefit from the sale of the business.

It's important for business sellers to maintain open communication with their suppliers throughout the business sale process, and to discuss their needs and expectations. Consulting with your professional contacts can provide guidance on managing relationships with suppliers while selling your business.

What might friends say in response to help the business seller?

As friends, their response to help the business seller may not involve legal or financial advice, but rather emotional support and encouragement. Here are some potential responses that friends could provide to a business seller with a seller financed business for sale:

  • Emotional Support: Friends can offer emotional support to the business seller during the process of selling their business, which can be emotionally taxing. They can lend a listening ear, provide words of encouragement, and offer empathy during any challenges or uncertainties the business seller may face.

  • Networking and Referrals: Friends can help the business seller by spreading the word about their business being for sale and making referrals to potential buyers within their networks. This can help increase the business seller's exposure and potential for finding a qualified buyer.

  • Positive Reinforcement: Friends can provide positive reinforcement and remind the business seller of their skills, achievements, and strengths as a business owner. This can help boost the seller's confidence and motivation during the sales process.

  • Practical Assistance: Friends can offer practical assistance to the business seller, such as helping with administrative tasks, preparing marketing materials, or organizing open houses or events related to the sale of the business. This can help alleviate some of the workload and stress associated with selling a business.

  • Moral Support: Friends can provide moral support by being a sounding board for the business seller's thoughts, concerns, and decisions related to the sale of their business. They can offer objective perspectives, share insights, and provide encouragement to keep going, especially during challenging times.

  • Celebrating Milestones: Friends can celebrate milestones and achievements with the business seller, such as finding potential buyers, receiving offers, or closing a sale. This can help boost the seller's morale and provide a positive outlook throughout the sales process.

  • Flexibility and Understanding: Friends can be flexible and understanding of the business seller's situation, knowing that selling a business can be a complex and time-consuming process. They can offer support without imposing any undue pressure or expectations on the business seller.

It's important to note that friends may not have the expertise in legal, financial, or business matters, but their emotional support and encouragement can be invaluable during the process of selling a business.


Each of the potetial conversations above focuses on the positive benefits and services that could be offered. On the other hand while people mean well, they could discourage you and be a distraction. Some of the professionals included above may not have much knowledge of seller financing, and could try to hide this from you. Or they might have a negative view of seller financing based on limited information. So with all the potential conversations covered in this article, and in Part 1, it's up to you to make the best use of available resources.

If you have a note for sale, get started now. please submit a business note worksheet, and I will start working to produce a deal for you.

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  1. Photo by Hans-Peter Gauster on Unsplash.


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