TradeExit Guide

Seller financing calculator

Enter the price, the share you will finance, the rate and the term to see the monthly payment you would receive, the balloon and the cash you get at closing. Seller notes on small-business sales commonly run a few years with a balloon; with SBA-financed buyers, standby rules can defer your payments.

Updated 2026-09-23 · 2 sources · By the TradeExit Guide team

Seller financing calculator

Monthly payment, interest and balloon on a seller note, and how much of the price you receive at closing.

Educational estimate. Assumes level monthly payments; ignores taxes, default risk and any SBA standby period (during which payments may be deferred).

Seller-note terms to negotiate

TermWhat to ask forWhy
SecurityA lien on business assets and a personal guaranteeIf the buyer fails, you need a claim ahead of other creditors
Rate and amortizationMarket rate; amortization no longer than you can waitLonger amortization lowers payments but raises risk
BalloonA date the remaining balance is dueCaps how long your money is at risk
Default and cross-defaultDefault if the buyer defaults on the senior (bank/SBA) loanEarly warning
SBA standbyKnow if your note must be on standbyUnder SBA SOP 50 10 8, a seller note counts toward the buyer's equity injection only if on full standby, which means no payments while it is

Taxes on a seller note

The installment method can spread capital gain over the years you receive principal, but depreciation recapture is taxed in the year of sale regardless (IRS Publication 537). Interest you receive is ordinary income. See seller notes and seller financing.

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Frequently asked questions

What is a typical interest rate on seller financing?

It is negotiated; it usually sits near or above bank rates because the seller’s note is junior to any bank or SBA loan. Use the calculator to see how rate and term change your payment.

Can a seller note be used with an SBA loan?

Yes, but under SBA SOP 50 10 8 a seller note counts toward the buyer’s equity injection only if it is on full standby (no payments) and it may cover at most half of the injection.

Sources

  1. SBA SOP 50 10 8 key changes (Whiteford client alert) (accessed 2026-09-23)
  2. IRS Publication 537 - Installment sales (accessed 2026-09-23)
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