Deal structure
Seller Financing
A seller note can bridge financing or valuation uncertainty, but it does not eliminate the need to understand the business fundamentals supporting repayment.
Buyer lens
Model all fixed obligations against normalized cash flow and identify which uncertainty the seller note is actually solving.
Seller lens
Use seller financing deliberately rather than as a substitute for an unsupported valuation or weak sale package.
Why it matters
- Senior debt and seller debt draw from the same operating cash flow.
- Seller exposure can align incentives but does not verify earnings.
- Subordination and default mechanics should reflect the discovered risk.
Evidence to reconcile
- Normalized cash-flow model
- Proposed note terms
- Senior lender structure
- Transition obligations
- Legal documentation