Seller financing is when the seller of the business agrees to finance a portion of the business sale. While it can be the primary source of financing, it is more likely that it will become one portion of the total buyer finances for the purchase of the business.
Sellers that provide financing will do a credit check on the buyer before they agree to it and will sometimes ask for collateral or a personal guarantee from the buyer. The seller will also most often require a down payment from the buyer.