Definition: A note payable or loan to the shareholder(s) or owner(s) of a business provided in the sale or transition of a company by the buyer. 

See Also: Promissory note , security agreement , UCC, UCC lien , seller carry-back.

Tips: Seller financing is typically used to bridge a valuation gap either where other forms of financing are not available or where a buyer desires to preserve the borrowing ability of the selling company for secured financing. Seller financing is subordinated below all other debt.