Seller Note

What are the Advantages and Disadvantages of Seller Notes when Selling a Pharmacy

First let’s define what a seller note is. When selling a pharmacy a private buyer will in most cases require a loan from a bank. When doing this it is customary for part of the loan to be provided by the seller. The normal amount is 10% of the acquisition but that can vary. Banks like this as it shows them the seller is confident in their business and it helps ensure the seller will assist the buyer in the transition.

For most sellers this does not sound great. There are negatives to a seller note, with the big one being the buyer may default and you may never receive that money.

However there are advantages which include:

  • the seller note is paid over time which means the taxes are as well, giving the seller additional tax strategies.
  • notes have interest so you as the seller receive interest and are ultimately paid more for the business.

Share:

Facebook
Twitter
Pinterest
LinkedIn
Email

Leave a Reply

Your email address will not be published. Required fields are marked *