Seller Note vs Bank Financing
Should you use seller financing or bank debt for your practice acquisition? Most successful deals use both. Understanding each option helps you structure optimal financing.
Seller Note Advantages
- Flexible terms
- Lower interest rates
- Easier qualification
- Faster closing
- Demonstrates seller confidence
Bank Financing Advantages
- Larger amounts available
- Established legal framework
- Builds banking relationship
- Refinancing options
- No seller interference
Comparison
| Factor | Seller Note | Bank Loan |
|---|---|---|
| Rate | 6-8% | 9-13% |
| Term | 3-7 years | 10-15 years |
| Amount | 10-30% | 70-90% |
| Approval | Negotiable | Underwriting required |
Optimal Structure
Most deals combine both:
- Bank: 70-80% of purchase
- Seller: 10-20% of purchase
- Buyer cash: 10%
Conclusion
Seller notes complement bank financing. The combination reduces down payment, improves terms, and aligns seller interests with practice success.
Structure your financing? Contact DentalBridge.