What is a seller's note?

A seller's note is a form of financing used in business transactions where the seller of a business provides a loan to the buyer to help facilitate the purchase. This note typically outlines the terms of the loan, including the interest rate, repayment schedule, and any collateral. Seller's notes are often used when buyers may have difficulty securing traditional financing and can serve as a way for sellers to demonstrate confidence in the business's future. This arrangement can help bridge the gap between the purchase price and the buyer's available funds.