Anyone ever get 100% seller financing?

May 01, 2024

by a searcher from George Mason University in Manassas, VA, USA

Hi Folks,

I'm currently under LOI and in the underwriting/closing stage on a $3.4M deal using the SBA in the manufacturing space. No issues so far at all, got my conditional approval within 5 days and now I'm just clearing contingencies.

I'm looking for a similar type business, but one thats smaller (just to increase the likelihood of finding one) and would potentially consider 100% owner finance with a large cash down payment. I'm told I could add more into my SBA loan but I dont want to upset or reset the process that's going perfectly smooth.

Ideal would be some type of machine shop or similar. Long term plans continue to be rolling up some of these into a manufacturing company that will expand into my home space of defense and national security.

Reply by a searcher
from Concordia University in New York, USA

I've heard someone talk about doing this on a podcast. I can dig it up if you'd like. You can look at my previous post where I discussed how I formed a new company with the previous owners and transferred everything to the new entity: https://www.searchfunder.com/post/acquired-search-to-startup

Slightly different situation but maybe some food for thought.

Reply by a searcher
in Cleveland, OH, USA

Gotten a few LOIs that were 100% seller financed. If the business in question has little to no debt, it can actually be a great deal for the seller! They get to collect interest instead of the bank, they get tax advantages, and often you can pay them more. A lot of retirees just want to have their money sit in a bank so they can withdraw occasional funds anyway, so it’s a good deal both ways in a lot of cases. Try it out!

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