Seller financing willingness

What it is

Whether the seller is willing to finance part of the purchase price themselves through a seller note, typically subordinated to the SBA loan. Under SBA's current rules (SOP 50 10 8, effective mid-2025), a seller note only counts toward your required equity injection if it's on full standby — no principal or interest payments at all — for the entire term of the SBA loan, and even then it can only cover up to half of the minimum 10% injection.

That full-loan-term standby condition is a tough ask for many sellers, which is why the two-note structure has become the common workaround: one note, fully standby for the life of the SBA loan, counts toward the equity injection; a second, separate note carries a shorter standby period and sits outside the equity calculation entirely. It's worth understanding this distinction before you assume a seller's general willingness to "carry paper" solves your equity injection on its own terms.

Why it matters

A seller willing to hold a note at all is a real signal — they're betting part of their own payout on the business continuing to perform after they leave. It also directly reduces how much outside capital and personal cash you need to bring to closing, but only if the note is actually structured in a way your SBA lender will accept.

What to look for

• Broker materials or listing details that don't mention seller financing at all
• Seller reluctance once you ask directly about carrying a note
• Proposed note terms — rate, term, standby period — that don't match what your specific lender requires for it to count toward the equity injection
• Whether the note is structured as truly subordinate, using the SBA's Form 155 standby creditor's agreement, rather than an informal side arrangement