The same seller note, from both sides
What happens when the seller carries part of the price. The figure does not change when you switch sides — the monthly payment is the same fact — but what it means to you does.
Prime 6.75% · as of 1 Aug 2026 · Federal Reserve H.15, August 2026 · set by Revanu
$126,000 carried by the seller at 7.00% over 5 years. The same number the seller sees — switch sides and nothing about the arithmetic moves.
A seller note moves part of the price off the bank’s book, which lowers the debt service the business has to cover and can turn a deal that fails coverage into one that clears. It also tells a lender the seller believes the business will keep performing — they are paid out of it.
Where it gets complicated: an SBA lender will usually require the seller note to be on full standby, so the seller may receive nothing until the bank is repaid. A balloon moves risk to a single date — you have to refinance or sell by then.
Coverage is tested on the whole debt: the $588,000 the bank lends beside this note, at 9.75% over 10 years with the guarantee fee financed, costs $94,348 a year, and the note $29,939 — $124,287 together.
Seller-note rates here are a default, not a market quote. Tax treatment of note interest and installment proceeds needs professional advice. Benchmarks, not offers, appraisals, or advice. Every result here shows the arithmetic that produced it so you can argue with it. Rates and fees vary by lender and by borrower.