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Seller Financing Revolution: Why Is It Becoming More Common?

September 6, 2025

Huge Opportunity

Three million businesses for sale. Baby boomer business owners need to exit but can’t. The sad truth is that 70 to 90% of those businesses will never sell. Seller financing might be the only way they will get their business sold. Why?

Most buyers who would normally have an interest in buying one of these businesses don’t have enough cash for a purchase. Banks that would normally make loans for a business purchase have tightened their lending requirements and asking for larger cash down payments from the buyer. You can get financing through a combination of bank and SBA guaranteed loans but that can be more complicated and still difficult to qualify for. And of course, current interest rates combined with high sales prices can make a deal difficult.

So Many Sellers!

There is also the problem of more businesses for sale than there are buyers looking. Unless the seller wants to do a liquidation and sell off all the assets, the best alternative could be seller financing. Why would a seller be inclined to do that?

More $ For The Seller, Easier For The Buyer

The best reason would be that the seller can sell the business, be rid of the responsibility, and still have an income from the business.

In addition to the income, the seller will actually get more money over time for the business because of interest payments on the loan.

In many cases the buyer will be willing to pay more for the business if they can do seller financing. It makes the process much, much easier when that kind of deal can be made. In some cases the seller could even be willing to beat the bank on interest rates in order to get a completed transaction.

There can also be some tax advantages by spreading the deal out over several years and not paying a big tax up front.

For Your Employees & Customers

Why would the seller be willing to do this? Because the alternative to this type of deal could be no sale at all. That would mean people losing their jobs and all that goes with that. It would mean a liquidation sale of all the assets which usually means selling assets for far less than their actual value. And then there are the customers. The business will no longer be there to help their customers.

Many of these reasons for doing seller financing can also apply to real estate. When buying a commercial property from a retiring baby boomer some of these same issues will come up. It’s an especially nice situation when you buy a business that owns the real estate it occupies. There are some great strategies for making the purchase and then separating the business from the real estate. That’s a topic for another article.

If you’re looking to buy or sell a business, consider the possibility of seller financing. It can be the difference between a great deal and no deal. If you’re a buyer don’t be afraid to make an offer that includes seller financing. Many sellers have never considered it. They might be willing!

That's it for this time. See you next week!

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