Seller Financing Structure: % of Purch Px or Total Uses

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March 21, 2024

by a searcher in Denver, CO, USA

Question for folks who've used seller financing as part of your transaction:

Do you typically ask for financing as a % of the purchase price or a percent of total uses? Any strong reason to favor one over the other?

(Want to avoid situation where seller potentially balks at prospect of financing your deal fees, cash to the B/S, as part of their 10-20% note. But if it's reasonably standard to have them finance total uses instead of just purchase price, would be helpful to know).

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Reply by a searcher
from Loyola Marymount University in New York, NY, USA
Following. I don't have an answer, but would love to know. We've been asking as a % of purchase price. Haven't closed on a deal yet though and havent attempted asking as a % of project cost.
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Reply by an intermediary
from The University of Chicago in Chicago, IL, USA
Use the KISS principle with seller. Do not drag the seller into buy-side challenges. The answer is % of Price.
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