All-Cash at Closing
The buyer pays the full agreed price at closing, typically from their own funds or a loan they've already secured. Simplest for you: you're done, fully paid, no ongoing risk tied to the buyer's performance.
Transition Structure Options
The price you agree on and how you actually get paid are two different conversations. Here's a plain-language look at the most common structures.
SBA / Bank-Financed
The buyer finances most of the purchase through an SBA 7(a) loan or conventional bank loan, and you're paid the full price at closing — the lender takes on the ongoing risk, not you. This is the most common structure for Main Street business sales, since it opens the buyer pool to people who don't have the cash on hand, which is most buyers.
Seller Note / Seller Financing
You finance part of the purchase price yourself: the buyer pays a down payment at closing and pays you the remainder over time, with interest, typically over two to five years. This can make your business easier to sell and often signals that you believe in its future. The tradeoff: part of your payout depends on the business continuing to perform after you've left.
Earnout
Part of the purchase price is contingent on the business hitting certain performance targets after the sale, usually revenue or profit benchmarks over one to three years. For you, it means part of your payout is tied to a business you no longer fully control — worth negotiating the terms carefully.
Equity Rollover ("Reverse Equity")
Instead of cashing out entirely, you keep a minority ownership stake in the business going forward, alongside the new owner or investor group. More common when a private equity buyer or larger acquirer is involved — it lets you participate in the business's future growth, with the tradeoff that some of your value is still at risk.
Combinations
Most real deals blend two or more of these — for example, a down payment funded by an SBA loan, plus a seller note for the balance. The right mix depends on the buyer, the lender, the size of the deal, and what matters most to you: certainty now, or upside later.
There's no universally “best” structure — the right one depends on your risk tolerance, your timeline, and who's actually buying. This is exactly the kind of thing worth talking through before you're already mid-negotiation. Apply for a Free Session