Hallam and Sean are correct. You cannot guarantee any seller more than 12-months of employment as part of the sale if you are doing a full business acquisition. Technically that employment is supposed to be as a 1099 employee as well. However, if the seller retains ownership you can keep them on as an employee for as long as you would like. However, if you do a partial acquisition and have them retain ownership, if they retain 20% or more of the business the seller must sign a personal guarantee for the life of the loan, and if they retain under 20% of the business they must sign a personal guarantee for the full loan amount for two years (if runs off at the end of two years so long as the loan has been current the last 12 months). We are not finding many sellers willing to do the guarantee. Two other things to keep in mind. First, if you do a partial business acquisition, any outside investors that get ownership are required to be co-borrowers on the loan, even if their ownership is under 20%. So that largely eliminates the ability to bring in investors for a partial business acquisition. Secondarily, if you have multiple owners and you are buying out one owner partially or fully and they are getting loan proceeds, but another minority owner is not getting any loan proceeds and will retain their ownership, that other minority owner (so long as they own less than 20%) is not required to guarantee the loan and you can keep them employed indefinitely. I hope this helps. If you have additional questions related to these rules you can reach me here or directly at redacted

^redacted‌ If you are a coborrower and there is a collateral shortfall, you may have to put up your home (for example) as additional collateral to secure the loan. If the situation where the seller is retaining equity, he or she has to guarantee the loan but is not responsible for meeting the collateral shortfall (if any). Does that help?