ISO buyers who did not take a seller note (SBA deal)

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by a searcher from Yale University - School of Management
in USA

1yr ago

ISO buyers who did not take a seller note (SBA deal)

I am negotiating to buy a very attractive business but one that is subject to some risk with supplier concentration and tariffs. Our only sticking point is the seller note I proposed (10%). Might not be able to move forward if I don’t drop it. Would love to hear from buyers who did not take one (SBA deal) and what you think now post-purchase.

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reply by a professional 1yr ago
from University of Pennsylvania in Washington, DC, USA

I agree with Lori. Seller notes are 100% standard for lower middle market deals and allow you to have a recourse against the seller if there are problems post-purchase

reply by a lender 1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I always recommend seller notes on all deals for our customers. Most SBA lenders prefer a seller note because it helps them know the seller is tied to the deal and confident the business will be successful. But it is important for you to have some leverage on the seller post-closing. Especially if you think there is a risk, you should pursue a seller note.