What is Seller Financing?
Category: Finance
1Definition
A transaction where the seller provides financing to the buyer instead of or alongside a traditional bank loan.
2Context
Common in real estate and business sales. Benefits buyers who can't qualify for traditional loans and sellers who want steady income.
3Example
A business owner sells their company for $500K, with the buyer paying $100K down and $400K over five years directly to the seller.
⚠Common Trap
Seller financing isn't free money—sellers take on default risk and should secure the loan with collateral.
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