Glossary · Your money in the deal
Seller note(seller financing)
In short
Part of the price the seller lets you pay over time instead of at closing. Common, and a good sign the seller believes in the business.
What it means in a deal
A seller note is a private loan from the seller to you, structured as part of the acquisition price. Instead of receiving the full price at closing, the seller takes monthly payments over a term you negotiate. For an SBA deal, a seller note on full standby can count toward your 10% injection — but the seller can't receive any payments during the life of the SBA loan, which the seller must acknowledge in writing on Form 155. Sellers who push back on standby are often signaling concern about the business's ability to service the combined debt.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Seller note
- Besides cash and seller notes, what other buyer contributions qualify for equity?
- If a seller note is on full standby, when can the seller start receiving principal payments?
- Can a seller's post-closing consulting agreement influence the standby status of their seller note?
- Can the seller's post-closing consulting agreement influence the standby status of their seller note?
- Can the seller receive interest payments on a fully subordinated seller note during the SBA loan term?
- What is the required duration of a full standby seller note?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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