Glossary · Doing the deal
Seller's Financing
In short
When the seller finances a portion of the purchase price, acting as a lender to the buyer. This reduces the cash you need upfront and shows the seller's confidence in the business.
What it means in a deal
In an SBA 7(a) acquisition, seller's financing often serves as part of your required equity injection. The SBA requires this financing to be on "full standby" for the life of the SBA loan, meaning the seller cannot receive payments until the SBA loan is fully repaid. Negotiate this carefully, as it impacts the seller's cash flow.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Seller's Financing
- Does the SBA 7(a) loan program allow for seller training period financing?
- How does seller financing structure impact the required equity injection for a business acquisition?
- What specific due diligence is required for seller financing in a change of ownership?
- If the business property is owned by the seller's separate entity, can the SBA 7(a) loan include financing for both the business and the property?
- What specific due diligence is needed for seller financing that is not on full standby?
- How much of my equity injection must be cash, rather than other assets or seller financing?
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 2026-06-15 · 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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