Seller finance occurs when the seller agrees to accept part of the purchase price over time.
Example
Purchase Price: £500,000
- £300,000 paid at completion
- £200,000 paid over 3 years
Benefits
For Buyers:
- Lower cash requirement
- Easier funding structure
- Reduced borrowing
For Sellers:
- Wider buyer pool
- Potentially higher sale price
- Continued income stream
Seller finance is one of the most effective tools available when acquiring a business.