Free tool / Owner financing & seller carry
Seller Financing Calculator
Seller financing, also called a seller note or seller carry-back, is a loan from the business seller to the buyer. The seller receives part of the purchase price at closing. The buyer pays the remaining amount over time, with interest, under the seller note.
Read the seller financing guideThis calculator provides general information only and is not legal advice. Using it or contacting Ecommerce Law Group does not create an attorney-client relationship. Representation begins only after you and the firm sign an engagement agreement.
Present Value of the Seller Note
Present value estimates what the note is worth in today’s dollars. Adjust the discount rate to reflect your opportunity cost or required return.
Amortization Schedule
| # | Date | Payment | Principal | Interest | Balance |
|---|---|---|---|---|---|
| Total |
Reading the Amortization Schedule
The amortization schedule lists each payment period with Payment, Principal, Interest, and Balance columns. Principal shows the portion that reduces the seller note. Interest shows the financing charge for that period. Balance shows what remains after the payment. In Interest Only + Balloon mode, regular payments may show interest without principal reduction, while the final row includes the remaining principal. Standby rows appear separately when a standby period is entered.
Seller Financing for an Online Business Deal
Ecommerce Law Group advises buyers and sellers on seller notes, purchase agreements, and attorney escrow for online business transactions. Talk with an M&A attorney about the payment terms, deal documents, and closing process.
Discuss Your Deal Learn About Attorney EscrowFree Seller Financing Calculator for Owner Financing and Seller Carry
A seller note can cover the gap between the buyer’s cash, third-party financing, and the purchase price. It reduces the cash due at closing and gives the seller payments after the sale. An SBA lender may require a seller note in the capital stack. The parties decide the note amount, payment schedule, security, and default terms as part of the deal.
Use this free seller financing calculator to model a seller note. Enter the purchase price, financing structure, interest rate, and term. The results show monthly or quarterly payments, total interest, a balloon payment, an amortization schedule, and the note’s present value. Switch between buyer and seller views to see the same deal from each side. Use the standby-period feature when lender requirements delay seller-note payments.
Owner Financing, Seller Carry, and Owner Carry Mean the Same Thing
A seller note reduces the buyer’s cash due at closing and gives the seller payments over time. Owner financing, seller financing, seller carry, and owner carry are names for that same structure in a business sale. The buyer pays the note under an agreed schedule. Use this calculator to compare the note amount, payment timing, interest, and remaining balance. Buyers and sellers can use the same inputs regardless of which label appears in the deal. The calculator models seller notes for business sales. Ecommerce Law Group handles online business transactions only. The final purchase agreement and promissory note state the parties’ actual terms.
How to Model a Balloon Payment
- Enter Purchase Price, Cash at Close, and any SBA Loan Amount.
- Confirm Seller Note Amount. Enter Annual Interest Rate and Note Term.
- Set Standby Period and Payment Frequency. Choose a Repayment Start Date.
- Choose Interest Only + Balloon under Payment Type. Select Calculate.
For example, on a hypothetical $500,000 online business sale with $400,000 paid at closing, enter a $100,000 seller note. Keep the page’s existing 6% annual interest rate and 24-month note term. The results show the regular interest payment, final balloon payment, total interest, and amortization schedule. For help with the deal documents and payment terms, contact Ecommerce Law Group.
Understanding Seller Financing in Online Business Transactions
With a seller note, the business seller finances part of the purchase price. The buyer pays cash at closing and may use third-party financing for another portion. The remaining amount becomes a promissory note payable to the seller over the agreed term, with interest.
- Seller Note (Seller Carry)
- A promissory note from the buyer to the seller for part of the purchase price, typically paid over 1 to 5 years with interest. The note is usually subordinate to senior debt, such as an SBA loan.
- Standby Period
- A period after closing when no seller-note payments are due. SBA lenders may require a standby period, commonly 12 to 24 months, before seller-note payments begin. The deal terms determine whether interest accrues during that period.
- Amortization
- The process of paying the note through scheduled principal and interest payments. Each payment reduces the outstanding balance until the note is repaid.
- Present Value
- The current value of future payments after accounting for time and risk. A $100,000 note payable over three years is worth less than $100,000 today because payment is delayed and may not be made in full.
When Seller Financing Fits an Online Business Deal
Seller financing can cover part of the purchase price when the buyer’s cash and third-party financing do not cover the full amount. A seller note reduces the cash due at closing. It also lets the parties set a payment schedule around the deal structure. The purchase agreement, promissory note, and any security agreement state the final terms.
Frequently Asked Questions
What are typical seller financing terms in an online business sale?
Seller notes typically range from 10% to 30% of the purchase price. In an SBA-backed transaction, the lender may require the seller to carry at least 5% to 10% of the purchase price on standby. The exact amount depends on the deal structure, buyer qualifications, lender requirements, and the parties’ negotiation.
What interest rate is normal for a seller note?
Seller note interest rates typically range from 4% to 8% annually. A common range is 5% to 6%. Rates below the IRS Applicable Federal Rate may trigger imputed interest tax rules. A tax advisor can confirm the tax treatment before the parties set the rate.
Can I negotiate the standby period on a seller note?
Yes. The standby period is negotiable, although an SBA lender may impose requirements tied to its loan. The parties also decide whether interest accrues during standby and whether the buyer can make voluntary early payments. The lender’s requirements and final deal documents control.
What happens if the buyer defaults on a seller note?
Default remedies depend on the promissory note and any related security agreement. A clear default clause states what happens after a missed payment. It may address late interest, acceleration of the balance, and the security the seller can reach.
Is owner financing the same as seller financing?
Yes. Owner financing and seller financing mean the same arrangement in a business sale. The seller accepts a promissory note for part of the purchase price. Seller carry and owner carry are other names for that structure. Buyers and sellers can use the same calculator inputs under any of these labels.
How does a balloon payment work on a seller note?
A balloon payment leaves principal due at the end of the seller note. Regular payments may cover interest or only part of the principal. Choose “Interest Only + Balloon” under Payment Type. The schedule shows the regular payments and the final payment that includes the remaining principal.
Can I use this calculator for an SBA deal with a seller note on standby?
Yes. Use the calculator to model a seller note with a standby period. Enter the standby months, choose whether interest accrues during standby, and add the other note terms. The results show payment timing and note costs. The lender determines whether it will accept the proposed seller note.