Seller financing deal analyser
Compare an all-cash close against a seller-financed deal — monthly payments, total interest, net cash flow after debt service, and the true economic cost of the financing.
Enter the purchase price, monthly net profit, and financing terms. The calculator shows your monthly debt-service payment, how much you pay in total interest, your net cash flow after servicing the debt, and the present-value discount vs an equivalent all-cash offer.
Seller financing deal analyser inputs and results
Payment schedule summary
| Period | Balance (start) | Interest paid | Balance (end) |
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How this calculator works
The monthly payment is calculated using the standard amortising loan formula on the financed portion (price minus down payment). Each period, interest accrues on the outstanding balance at the monthly rate (annual rate ÷ 12), the rest of the payment reduces principal, and the balance steps down until it reaches zero at the end of the term.
Net cash flow is simply the monthly profit minus the monthly debt-service payment. If this is negative, the business does not currently cover its own financing costs — you would need to fund the shortfall from reserves or other income, or negotiate better terms.
The interest premium shows the total interest paid over the full term — the real economic cost of the financing above the purchase price. Compare this against the return you could earn on the capital you're not deploying at close when deciding whether seller financing is attractive.
Use the acquisition payback & IRR calculator to model the full return on investment before and after financing costs.
About this tool
Seller financing lets you buy a business with less capital upfront — but you pay interest over the term. This tool compares an all-cash purchase against a seller-financed deal side by side: monthly payment, total interest paid, net monthly cash flow after debt service (assuming a monthly profit input), and the effective discount relative to an all-cash close at a lower price.
Frequently asked questions
What is seller financing?
Seller financing (also called vendor financing or owner financing) is when the seller of a business accepts a portion of the purchase price paid over time, rather than all cash at closing. The buyer makes a down payment, then regular principal-and-interest payments — effectively borrowing directly from the seller instead of a bank. It's common in online business acquisitions because many buyers lack access to SBA loans, and sellers benefit from deferred capital-gains treatment and ongoing income.
Why does seller financing sometimes cost more in total?
Because you pay interest on the outstanding balance throughout the term. A $400,000 business financed at 8% over 3 years generates substantial interest charges on top of the principal. The total amount repaid will always exceed the purchase price unless the interest rate is zero. The question is whether the return on the deployed capital (or the capital preserved for other investments) more than offsets the interest cost.
What is the effective discount?
This tool calculates the lump-sum cash equivalent of your seller-financed deal by discounting each future payment back to today using the seller's interest rate as the discount rate. The difference between that present value and the all-cash price shows the real economic cost of the financing — or equivalently, how much lower an all-cash offer would need to be to be equivalent.
What interest rate is typical for seller financing?
Most seller-financed deals in the online business space carry rates of 6–10% annually. Rates below prime are uncommon unless the seller is highly motivated or the deal is structured with other concessions. Rates above 12% signal a high-risk deal. The Prime Rate plus 1–3% is a reasonable starting expectation.
How long are seller-financing terms typically?
Most seller-financed deals for online businesses run 12–36 months. Longer terms (48–60 months) are possible for larger acquisitions. Very short terms (6–12 months) look more like earnouts or deferred payments. The term needs to be short enough that the seller remains motivated and the buyer can exit cleanly if the business underperforms.