The Advantages of Seller Financing For Startups

Seller financing has advantages for both sides of a deal.

By Michelle Goodman • Nov 12, 2012

Opinions expressed by Entrepreneur contributors are their own.

Bill Short wasn't worried about how he'd finance FiberTech, the Atlanta-area fiber optics company he wanted to purchase. The former banking professional had stellar credit and enough money to make a sizable down payment on the business, which was priced in the "low seven figures."

The rest, he imagined, he'd borrow. But when Short applied for an SBA loan, he was told the government body required at least 10 percent of the deal to be financed by the seller. Although Short hadn't considered taking a loan from the seller, he was happy to comply if the terms were right.

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