What is a seller note?

A seller note is a financial instrument used in the sale of a business or property. It is essentially a loan from the seller to the buyer of the asset being sold. The buyer agrees to make payments to the seller over an agreed-upon period of time, with interest, until the balance of the loan is paid off. The terms of the seller note are negotiated as part of the sale agreement, and may include repayment terms, interest rates, and penalties for late payment. Seller notes can be a useful tool for sellers who want to sell their asset but don't want to receive a lump sum payment up front. It can also be a way for buyers to finance the purchase of an asset without having to go through a traditional bank loan. However, it's important for both parties to fully understand the risks and potential pitfalls of seller notes, such as default or delinquency on payments, and to seek legal and financial advice before entering into such an agreement.