Seller Financing Calculator
See what a seller note costs you each month, how much cash you need at closing, and whether the business can pay for itself.
Your monthly payment
$16,221
$16,221 to the seller
Cash at closing
$200K
Seller carries
$800K
DSCR
1.54x
Seller note: $800,000 (80% of price)
Business annual profit (SDE / EBITDA)
Your deal
What this deal really costs
$1,000,000 purchase, 20% down, $800,000 seller note at 8% over 5 years.
Total monthly
$16,221
$194,653 per year
Cash at closing
$200K
20% down
Seller carries
$800K
80% of price
Interest to seller
$173K
over the term
Total cost of deal
$1.17M
price + all interest
Can the business pay for itself?
Debt coverage (DSCR)
1.54x
Comfortable: 1.5x or more
Cash left after debt
$105K
per year, before your salary and tax
Cash-on-cash return
53%
year-1 cash after debt / cash down
Vetted ecommerce, Amazon FBA and SaaS deals from $200K to $20M. Many sellers are open to financing.
Seller note payment schedule
$800,000 at 8% over 5 years.
| Year | Payment | Interest | Principal | Balance left |
|---|---|---|---|---|
| 1 | $194,653 | $59,101 | $135,552 | $664,448 |
| 2 | $194,653 | $47,851 | $146,803 | $517,645 |
| 3 | $194,653 | $35,666 | $158,987 | $358,658 |
| 4 | $194,653 | $22,470 | $172,183 | $186,474 |
| 5 | $194,653 | $8,179 | $186,474 | $0 |
Estimates only. Real terms depend on your purchase agreement, any lender, and how the note is secured. This is not financial or legal advice.
How it works
How seller financing works when you buy a business
Seller financing (also called owner financing or a seller carry-back) is the seller lending you part of the purchase price. It is the most common way online businesses between $200K and $20M actually get bought.
Agree the price and the split
You and the seller agree the purchase price and how it is paid: cash at closing, any SBA or bank loan, and the portion the seller will carry as a note. The note is usually 10 to 60 percent of the price.
Sign a promissory note
The seller note is a legal loan agreement between you and the seller: principal, interest rate, term, payment schedule, what secures it (normally the business assets, often a personal guarantee) and what happens on default.
Close and take over
At closing you pay the cash portion, the assets transfer, and the seller typically stays on for a transition period. Because the seller is still owed money, they have every reason to make the handover work.
Repay from the business's cash flow
Each month you pay the seller (and any bank) out of the profit the business generates. That is why DSCR matters: the deal should still leave you cash after debt service and your own salary.
Benchmarks
Typical seller note terms on online business deals
What we see across Shopify, Amazon FBA, DTC and SaaS acquisitions. Use these as starting points in the calculator, then negotiate.
| Term | Typical range | Notes |
|---|---|---|
| Cash down payment | 10% to 30% of price | Lower with an SBA loan in the stack; higher on smaller, riskier deals |
| Seller note size | 10% to 60% of price | 10 to 20% when paired with SBA; up to 60% on deals with no bank |
| Interest rate | 6% to 10% | Below bank rates; higher if interest-only or subordinated |
| Term | 3 to 7 years | 3 to 5 years is most common for online businesses |
| Payment type | Fully amortising | Interest-only with a balloon appears on larger or SBA-backed deals |
| Deferral / standby | 0 to 24 months | SBA lenders often require the seller note to be on full standby for 2 years |
| Security | Business assets + personal guarantee | Seller usually takes a second lien behind any bank |
Worked example
A $1M ecommerce brand, two ways
Same business, same $300K of annual profit. The structure changes how much cash you need and how much of the profit goes to debt.
Structure A
20% down, seller carries 80%
- Cash at closing: $200,000
- Seller note: $800,000 at 8% over 5 years
- Monthly payment: $16,221 ($194,653 a year)
- Total interest: $173,267
- DSCR: 1.54x · cash after debt $105,347
Fast to close, no lender. Coverage is on the tight side, so a slow year would hurt. Sellers rarely carry this much unless the buyer is strong.
Structure B
10% down, 75% SBA loan, 15% seller note
- Cash at closing: $100,000
- SBA 7(a): $750,000 at 10.5% over 10 years
- Seller note: $150,000 at 8% over 5 years
- Monthly payment: $13,162 ($157,939 a year)
- DSCR: 1.90x · cash after debt $142,061
Half the cash down and the seller only carries 15%, which most sellers accept. The 10-year bank term keeps monthly payments lower, at the cost of more total interest and a longer process.
Try both in the calculator: set the SBA loan to $750,000 and down to 10% to reproduce Structure B.
For buyers
Seller financing: pros and cons
Why buyers ask for it
- Less cash needed at closing, so you can buy a bigger or better business
- Faster than a bank: no underwriting, often closes in weeks
- The seller stays motivated through the transition because they are still owed money
- Rates are usually below what a bank would charge for the same risk
- Terms are negotiable: deferrals, earn-out components, prepayment without penalty
What to watch
- ! You are personally on the hook: seller notes almost always carry a personal guarantee
- ! Interest-only notes end in a balloon you must refinance or pay in cash
- ! A large note plus a bank loan can push DSCR below what the business can carry
- ! Default terms can let the seller take the business back
- ! Sellers may ask a higher price in exchange for carrying paper
Negotiation
How to negotiate a seller note
Lead with the note, not the price
A seller who wants $1.1M all-cash will often take $1.2M with $300K carried over 5 years. Total cost of the second deal can still be lower for you once you factor in what the cash would otherwise cost.
Ask for a standby period
Twelve to twenty-four months of deferred or interest-only payments on the seller note gives the business time to prove itself under you before principal repayment starts. SBA lenders frequently require this anyway.
Tie part of it to performance
If revenue depends on the seller (key supplier relationships, a personal brand), make a slice of the note conditional on revenue staying above an agreed line for the first year.
Keep DSCR above 1.25x after your salary
Run the numbers with the salary you actually need to live on subtracted from profit. If coverage falls under 1.25x, lengthen the term, lower the note, or lower the price.
Secure it sensibly
Expect to sign a personal guarantee. Push back on cross-collateral over unrelated personal assets, and make sure a bank lien, if any, sits ahead of the seller's so both agree on priority.
FAQ
Seller financing questions
The seller acts as a lender for part of the purchase price. You pay a cash down payment at closing, the seller carries the remainder as a promissory note (the "seller note"), and you repay it in monthly instalments with interest over an agreed term, typically 3 to 7 years. The note is usually secured by the business assets and sometimes a personal guarantee. If the deal also includes an SBA or bank loan, the seller note normally sits behind that lender in priority.
Ready to put the numbers to work?
Browse vetted online businesses for sale, many with sellers open to financing, and talk to an advisor about structuring your offer.