Seller financing for startup acquisitions
How seller financing works for small startup sales — typical structures, interest rates, security, and when to say no.
- 60% of sub-$500k SaaS deals in 2026 involve some seller financing.
- Typical: 70–90% cash at close, remainder over 12–24 months at 6–9% interest.
- Always secure the note against the assets. Personal guarantees are optional but common.
Standard structures
Straight amortizing note: fixed monthly payments over 12–24 months. Earn-out: payment contingent on hitting revenue targets. Hybrid: partial fixed + partial earn-out. Straight amortizing is cleanest.
How to protect yourself as the seller
Security agreement over the acquired assets. Personal guarantee from the buyer. Right to reclaim if payments stop for >60 days. Quarterly reporting of key metrics.
FAQs
Prime + 2–3%. In 2026 that's roughly 8.5–9.5% for US deals.
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