Seller Financing Calculator
Are you considering a deal subject to seller financing? Are you interested in understanding what your repayment schedule would look like? Try our seller financing calculator to understand your repayments and / or return.
These deals are becoming increasingly common and something that buyers and sellers should be well aware of. There are advantages and disadvantages. For a full understanding of how seller financing works please read Why Seller Financing Makes Sense.
Seller Financing generally relates to a proportion of the agreed sale price. It is an agreement to pay / fund an amount over time where this principal balance bears interest at an annual rate, i.e. 6% per annum, with the principal and interest paid in monthly installments based on an agreed period, typically between 1-5 years.
Let’s illustrate. The owner of the business agrees to a sale price of $5,000,000 ($1MM). The buyer agrees to pay $3,500,000 on close and then agrees to fund the remaining balance of $1,500,000 over 5-years. There is also an agreement to pay this amount at an interest rate of 6% per annum, paid in monthly installments. If we assume the above, the repayments would be $28,999.20 per month. Plug in the numbers below to see how the interest rate payments schedule is applied annually or monthly.
To get started, enter the seller financed portion of the deal, nominate the interest rate, fill in the term and repayment start date and hit calculate.