Buying with Seller Financing

Seller financing bridges gaps when bank financing falls short. Understanding the structure helps you negotiate favorable terms.

How Seller Financing Works

The seller acts as the lender, receiving payments over time rather than full cash at closing.

Typical Structure

• 10-20% of purchase price
• 5-7 year amortization
• 6-8% interest rate
• Secured by practice assets

Benefits for Buyers

• Lower down payment requirement
• Faster closing process
• More flexible terms
• Shows seller confidence in practice
• May qualify for SBA with 10% total down

Benefits for Sellers

li>Tax advantages (installment sale)
• Higher total return with interest
• Helps close deals
• Buyer incentive to maintain practice value

Negotiation Points

• Interest rate (market vs seller's desired)
• Term length
• Prepayment penalties
• Default provisions
• Personal guarantee requirements

Risks to Consider

• Seller retains lien on practice
• Default could mean losing practice
• Limited recourse if disputes arise

Bottom Line

Seller financing can make deals work when traditional financing is tight. Structure carefully and treat seller as a true partner in your success.

Financing structure help? Contact DentalBridge.