Action Academy | Millionaire Mentorship For Your Life & Business How / When To Negotiate SELLER FINANCING When Buying Your First Small Business
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Mar 19, 2026 Clear breakdown of seller financing basics and which deal elements you can negotiate. Reasons sellers agree to carry paper and how that speeds or complicates closings. Definitions of seller notes, earnouts, subordination, and performance-based adjustments. Practical cautions on transition consulting, balloon payments, capital stack placement, and when a seller-finance deal becomes too risky.
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Get 5–10% Seller Carry To Align Incentives
- Do seek seller carry of at least 5–10% alongside an SBA loan to align incentives and ensure the seller helps during transition.
- Seller carry reduces tax hit for sellers and motivates them to support you since they still have money at risk.
Subordination And Standby Matter For SBA Deals
- Seller notes are subordinate to SBA loans, meaning the bank gets paid first and seller note holders are second in line.
- Standby notes pause payments for a defined period and full standby may mean no payments for the SBA term, affecting SBA injection rules.
Don't Use Seller Notes As Your SBA Down Payment
- Avoid using seller notes as your SBA down payment because 2025 SBA rules disallow seller financing to count toward injection unless it's on full standby for the entire loan.
- Bring actual capital for the 10% injection instead of relying on seller carry as down payment.
