Surveys have shown that a seller who asks for all cash, receives on average only 70 percent of his or her asking price, while sellers who accept terms receive on average 86 percent of their asking price. That’s a difference of 16 percent! In many cases, businesses that are listed for all cash just don’t sell. With reasonable terms, however, the chances of selling increase dramatically and the time period from listing to sale greatly decreases. Most sellers are unaware of how much interest they can receive by financing a portion of the sale price.

In some cases it can greatly increase the final selling price. And, again, it tells the buyer that the seller has enough confidence that the business can, indeed, pay for itself.

In addition, the seller may be able to minimize the current year’s tax liability by receiving payment over a period of time.  The interest payed on the promissory note will also increase the final amount received for the sale of the business.  So, in many cases, it becomes a win/win situation for both the buyer and seller.