Seller financing calculator
Structure a seller-financed acquisition: cash needed at closing, monthly payment to the seller, total interest, and whether the business's profit covers the note.
Results
The amortization formula
Monthly payment = L × r ÷ (1 − (1 + r)^−n), where L is the amount financed by the seller, r the monthly interest rate (annual rate ÷ 12) and n the number of months.
Example
A $120,000 SaaS, 40% down ($48,000), the seller finances $72,000 at 7% over 36 months: the monthly payment is about $2,223. With $4,000 of monthly profit, debt coverage is 1.8x.
Why sellers agree to it
- A higher total price in exchange for spreading the payment.
- Interest income on the note.
- A signal of confidence: a seller who finances part of the price believes the business will keep earning.
Protect both sides with a security interest on the assets and clear default terms. Seller financing isn't available on TrustMRR (lump-sum escrow only): see our marketplace comparison and the buying guide.
Frequently asked questions
How does seller financing work when buying a business?
The buyer pays part of the price at closing (the down payment) and the seller lends the rest, repaid in monthly installments with interest over an agreed term. The terms are written into a promissory note alongside the purchase agreement.
What is a typical seller financing term?
For small online businesses, notes of 12 to 36 months with a 30-60% down payment are common, at an interest rate negotiated between the parties. Larger deals can run longer.
What debt coverage should I aim for?
A debt service coverage ratio (monthly profit ÷ monthly payment) of at least 1.5x leaves room for a bad month. Below 1.2x, any dip in revenue means paying the seller out of your own pocket.
Can I use seller financing on TrustMRR?
No. TrustMRR only supports a single lump-sum payment through Escrow.com. Seller-financed deals happen on platforms like Acquire.com or Flippa, or privately with a lawyer-drafted note.