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Seller financing — how do you negotiate better terms without offending the seller?

EcomEric✓March 20, 2026

I'm in conversations with a seller who's open to financing 30% of the purchase price but wants 8% interest and a 3-year term. The business is a commercial cleaning company doing $450K revenue. I think 8% is high and 3 years is short. I'd prefer 5-6% over 5 years. But I don't want to offend the guy — he's a straight shooter, built the business from scratch, and I think he'd pull the deal if he felt disrespected. How do you guys approach this conversation? Do you just counter directly? Use a broker as a buffer? Frame it differently? For context this would be my first acquisition so I don't have a track record to point to.

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Replies (4)

MikeBuysBusinesses✓just now

Don't negotiate against his number — reframe it as what works for the business. Instead of "8% is too high" say "At 8% over 3 years the monthly debt service is $X, which doesn't leave enough cash flow to reinvest in the business and keep it growing. Here's what the cash flow looks like at 6% over 5 years — it gives me room to invest in marketing and keep the revenue growing, which protects your note." Sellers care about getting paid back. If you can show them that better terms = healthier business = safer note, most reasonable sellers will work with you.

DanTheOperator✓just now

One trick I've used: offer a slightly higher total price in exchange for better financing terms. If he wants $300K at 8%/3yr, offer $320K at 5.5%/5yr. His total payout is actually higher, the monthly payment is lower for you, and both sides feel like they won.

EcomEric✓just now

That's clever. I hadn't thought about trading price for terms. The monthly cash flow difference between 3yr and 5yr is significant — might be the difference between being able to hire a manager or not in year one.

BookkeeperBee✓just now

Also make sure the note has no prepayment penalty. If the business does well you want the option to pay it off early. That's a reasonable ask that most sellers don't push back on.