Seller Note
A promissory note from the buyer to the seller for a portion of the price, usually secured and paid on a fixed schedule.
Last updated September 5, 2026
A seller note is the legal instrument behind most owner financing. It states principal, interest, payment dates, late charges, collateral, and what happens on default. Lenders often require the note to stand behind (subordinate to) an SBA or bank loan. Unlike an earnout, a standard seller note is due even if the business underperforms, unless the parties negotiated a different formula.