About Business Notes

What are business notes?

Financing arranged by sellers to facilitate the sale of their business. Business notes are also called promissory notes, seller-carryback notes, seller carry notes, seller takeback notes and owner carry notes.

Usually a seller will issue a business note because the buyer wasn't able to obtain enough, or any, financing by traditional methods. Business notes can facilitate a sale when buyers:

Couldn't qualify for conventional or SBA financing
Were unable or unwilling to pay all cash
Want to conserve cash for working capital

The seller is effectively making a loan to the new buyer, usually for the difference between the sale price and the total down payment. For example, an owner sells his $225,000 business for $78,000 down and a $147,000 note; the $147,000 note is called a business note.

Once the seller and buyer have agreed to the terms of the financing, they sign a promissory note which acts as a contract between both parties. Once the note is signed, the seller becomes the note holder.

With the business note signed, the interests of both parties have been met. Sellers have assured the sale of their business by financing the note themselves and will collect monthly payments plus interest; buyers have found an affordable way to purchase a business.

Flowchart: The creation and sale of a business note (Adobe pdf 8.7kb)

Types of purchase options

We try to offer the most flexible purchase plans. Security Financial purchases whole (the entire number of monthly note payments) or partial (a portion of payments) notes.