Seller Annuities (Owner Financing)

Seller financing used to be optional but in today’s business sales climate with banks becoming more difficult to work with, seller financing is no longer an option. It is required to sell Main Street businesses and, in most cases, lower middle market Mergers and Acquisitions-size businesses, too.

In fact, if someone now uses an SBA (Small Business Administration) guaranteed bank loan, then the bank and the SBA will require the seller to carry back some substantial portion of the sales price in a secondary lien position.

Many Business Sellers have discovered (see video) that doing owner financing is a great benefit to them for some, if not all, of the following reasons:

• Get a higher purchase price for the business
• Pay taxes as the payments are made, not paying a lump sum on April 15th the following year
• Brings more and better qualified buyers
• Provides an annuity for the seller in the form of monthly income
• Seller has flexibility of doing the payments for a short term or long term by ballooning the note
• Higher interest rate on a seller carry back note than is currently available through CD’s.
• Secure investment (if buyer defaults then you, the seller, can take it back over and protect your investment until CBI-Sunbelt sells it again for you)
• You are in a protected, secured lien position with mortgage and/or UCC filings done by a Closing Attorney along with a promissory note with personal guaranty by the buyer
• You are provided the buyer’s credit report, resume, business plan and other information so you can make sure you are comfortable with the buyer’s ability to pay the note
• Less expensive than bank financing which means the buyer has more money to use as a down payment, money which goes to you, the seller

Seller financing can help most sellers so talk with your CBI Advisor today about how Seller financing can create an annuity for you and your family.