Seller Financing in an Arizona Business Sale: the full guide

Seller financing means you carry part of the price. The buyer pays cash at close for some of it. You take a promissory note for the rest, with security terms counsel writes. You are not a bank. You are the lender of the last dollars on your own file.

I price the business on cash flow first. Structure comes after. A note is not a gift to the buyer. It is a term we put on paper when the file needs it.

How I run the rest of a listing is on Sell My Business.

Bank or SBA money often stops short of the full price. A note can close that gap. Some buyers also want you economically tied to a clean handoff. Skin in the outcome.

On an SBA deal a note counts toward the buyer's equity only on full standby, no payments for the life of the SBA loan, and only up to half of the equity SBA requires from the buyer. The SBA loan calculator shows what a standby note does to the buyer's cash and loan.

It is not automatic. A buyer who can fund the whole price does not need your paper. A buyer who cannot show a path to pay you should not get it.

The clocks around listing and diligence are on how long a sale takes in Arizona.

You may wait on payments. If the buyer defaults, you are still in the file. Security, personal guarantees, and default remedies belong in the paperwork. That is counsel's lane.

Carrying a note can widen the buyer pool. It can also leave you collecting instead of walking away clean. I will tell you when I think the risk is worth the close and when it is not.

On the term sheet it is usually a down payment, a note amount, a term, and what secures it. Sometimes a higher price is paired with terms. Sometimes it is the only way a qualified operator can close.

A note is not an earnout. Fixed payments for financed principal are one thing. Money tied to future performance is another. Different risk. Different documents.

Asset versus stock is a different fork. See asset sale vs stock sale in Arizona.

This page is general education. It is not loan advice, legal advice, or tax advice. I will not invent a rate. I will not prescribe a tax result.

Counsel writes the note and the security. A CPA answers the tax questions. I help surface whether the file needs terms so the term sheet matches reality.

The worksheet that starts that conversation is Value My Business.

I work across Arizona. Restaurants, bars, service businesses, and contractors. I talk structure on the file in front of us.