How I Sold My Business with Owner Financing
So… You Wanna Sell Your Business But Keep a Slice of the Pie?
Let me tell you a little secret most people don’t talk about: selling your business doesn’t always mean walking away with a big fat check and heading to Cabo.
Sometimes, you’ve gotta play the long game.
That was me not too long ago. After 14 years of blood, sweat, bad coffee, and even worse client emails, I finally decided to sell my digital marketing agency. But the market wasn’t exactly raining down all-cash offers. Not unless I wanted to sell to some sketchy PE firm that would gut everything I built like a fish.
Instead, I sold the business with owner financing.
Yeah, it sounded complicated to me too at first. But stick with me—I’ll walk you through exactly how it worked, what I wish I knew sooner, and why it might actually be the smartest exit strategy you’ve never considered.
What Is Owner Financing in a Business Sale?
Before we get into the juicy details, let’s make sure we’re all on the same page. I spoke to Cliff Smith, the CEO at Business Broker News blog and this is that he said, “Owner financing is like being the bank for the person buying your business. Instead of them paying you everything upfront, they give you a down payment, and then you receive the rest in regular payments over time.”
Imagine selling your house, but instead of the buyer getting a mortgage, you become their mortgage lender. Only this time, it’s not a house—it’s your business baby.
Why I Went the Owner Financing Route
Let me rewind to the first real offer I got.
This guy, let’s call him “Greg,” came through a referral. Super enthusiastic, had that ex-startup bro energy (you know the type). He loved my business, saw potential, and was almost ready to buy. One tiny hiccup—he couldn’t get traditional financing.
Banks weren’t feeling him. SBA loan fell through. I was about to walk away, but then he hit me with: “Would you consider financing it yourself?”
At first, I thought… absolutely not. I’m not in the business of being a bank.
But after a couple of sleepless nights and a phone call with my accountant (shoutout to Lisa, the real MVP), I realized: this could actually be a win-win.
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I’d still get a decent chunk of cash up front
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I could earn interest on the payments (hello, passive income!)
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And I’d spread the tax hit out over time instead of taking it all in one brutal lump
It started sounding less like a risk and more like… a strategy.
Breaking Down the Business Deal (Without the Boring Legalese)
Here’s what we agreed on:
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Sale price: $480,000
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Down payment: $120,000 (paid at closing)
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Financed amount: $360,000
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Terms: 6% interest over 5 years, paid monthly
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Collateral: The business itself + a personal guarantee from Greg
We brought in a lawyer to write up a promissory note, outlined what would happen if he defaulted, and set up a schedule with auto-pay so I wouldn’t be chasing him down every 30 days like a glorified bill collector.
I won’t lie—signing the paperwork felt like sending your kid off to college. You hope they’ll thrive, but there’s still that tiny pit in your stomach wondering if they’ll burn the place down by Thanksgiving.
But this was all made a little bit easier because we spent time before purchasing to find the best business broker we could by reading this article on FOX4KC.
The First Year: Watching from the Sidelines
The first few months were… weird.
I wasn’t in the trenches anymore, but I still had this emotional investment. I’d randomly check the company Instagram. I even caught myself typing out an email to the new team with “suggestions” before deleting it like a sane person.
But Greg held it down.
Payments came in on time. He made some solid changes. Revenue dipped for a bit, but then bounced back. I realized I could relax a little. Maybe even trust the process.
If you’re thinking of going this route, here’s something I didn’t expect: the emotional rollercoaster. Letting go isn’t just about logistics—it’s about identity. You’re not just transferring ownership; you’re redefining your purpose.
That’s deep. And yeah, maybe I got a little too into journaling during that time. Don’t judge.
What I Wish I Knew Beforehand
Okay, let’s get practical. If you’re considering selling your business with owner financing, here’s what I learned the hard way:
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Vet the buyer like you’re hiring a CEO
Owner financing works only if the buyer is capable and trustworthy. Check their background. Talk to references. Ask hard questions. -
Don’t skip the legal stuff
Have a legit lawyer draft everything. Promissory note, security agreements, default clauses—the whole nine yards. Trust me, DIY contracts from Google templates will come back to haunt you. -
Set up automatic payments
Seriously. Don’t rely on anyone’s “I’ll remember” optimism. Put it on rails. -
Stay emotionally detached (as much as you can)
It’s easy to Monday-morning quarterback the buyer’s decisions. But once you sell, you’re not the boss anymore. Unless you like ulcers, let go. -
Understand the tax implications
Depending on your structure, you might qualify for the installment sale method, which can be way better than paying everything in year one. CPA guidance is essential here.
Would I Do It Again?
Honestly? Yeah. In a heartbeat.
Selling with owner financing wasn’t just a financial move—it was a chance to be part of a transition that actually felt… human. No corporate vultures, no ridiculous earn-outs, no soul-crushing 2-year “consulting” periods where you’re still running the show under a new logo.
I got paid. I got peace. And I got to see my business grow without me micromanaging the life out of it.
There’s something beautiful about that.
Key Takeaways: Selling with Owner Financing
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💰 You don’t need an all-cash buyer to exit your business profitably
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🧠 Vet your buyer like they’re marrying your daughter
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📜 Legal structure is everything—don’t wing it
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🧘♂️ Let go of control (and your ego)
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💡 Tax perks can be real if structured right
Final Thought:
Owner financing isn’t for everyone. But if you’re sitting on a great business, and the right buyer comes along without the full cash… don’t automatically shut the door.
Sometimes the best exits aren’t about getting out fast—they’re about handing off the torch in a way that feels right.
Besides, what’s a little passive income between former owners? 😉
Let me know if you’ve ever gone this route—or are thinking about it. Always happy to swap stories and lessons over virtual coffee ☕️.