After a sale takes place, the seller and buyer frequently disagree about the future of the business. This disagreement is a natural outgrowth of their different positions and can become serious. If a seller note is in place, the seller has a motive to temper any irritation caused by the buyer with forbearance. Even with a non-compete agreement in place with the seller, the fact that the business owes the seller a major amount of money may change the nature of the seller's attitude. Instead of being indifferent or quarrelsome, a seller who is still owed money is more likely to be solicitous and genuinely helpful.
Seller financing can be as creative as sellers and buyers want to make it.
Most sellers, however, like to add security provisions in as many forms as possible. This can encompass personal guarantees as well as specific collateral, stock pledges, life and disability insurance policies and even restrictions on how the business is run. The most common requirement is for a personal guaranty by the buyer and the buyer's spouse. Sellers expect this. If a buyer objects, sellers immediately question their seriousness.