Seller Financing

Seller Financing

Transworld Business Advisors works in the small business mergers & acquisitions market, which means we work with a lot of family owned, main street type businesses. We love working with these types of small businesses, however these deals can be on the smaller side requiring creative financing (outside of traditional lenders) to get the business transaction done.


One way to get these deals financed is called seller financing or seller carry. In layman's terms, seller financing is simply a loan from the seller to the buyer of the business for a portion of the purchase price and usually includes a down payment. When a business owner is wondering how to sell a business, this is one great way to provide an incentive beyond the characteristics of the business.


Besides making it possible for deals to be completed, there are a number of exciting benefits that seller financing adds to a transaction for both the seller and the buyer.


Benefits to the Seller

  • Initially, the seller receives a down payment, but over the term of the loan they receive recurring monthly income (including interest) in the form of the loan payment.
  • Tax liability is deferred for the seller, since they do not receive the entire purchase price in one lump some. This can make a capital gains taxes much more palatable!
  • The seller can leverage their willingness to finance the transaction  to command a higher purchase price from the business buyer.


Benefits to the Buyer

  • The cash outlay for the buyer is initially reduced, allowing them to immediately attain a higher return on their business purchase investment.
  • The interest paid to the seller now becomes a deductible business expense.
  • The seller has an incentive to support the ownership transition and continued success of the business because they would like to be repaid on their loan. Usually this makes them more accessible to the buyer.

Seller financing is a mutually beneficial tool to help sell your company and can work especially well in business transactions that require creative financing. If you’re interested in learning how seller financing can support your future business transaction, we invite you to schedule a free consultation or visit our website for more information.


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Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!


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