Best examples of purchase agreement samples with seller financing

Real-world examples of purchase agreement samples with seller financing

Most people searching for examples of purchase agreement samples with seller financing want to see how the money and legal language actually show up on paper. So let’s start with real scenarios and the kind of clauses you’d typically see, then build from there.

Example 1: Small business sale with partial seller financing

Imagine a buyer purchasing a neighborhood HVAC business for \(600,000. A bank is only willing to lend \)360,000, and the buyer has \(90,000 cash. The gap is \)150,000. The parties agree that the seller will finance that gap.

In this example of a purchase agreement with seller financing, you’d typically see language like:

Purchase Price: $600,000

Cash at Closing: $90,000

Bank Financing: $360,000

Seller Financing: $150,000, evidenced by a Promissory Note at 7% interest per annum, amortized over 7 years with a 5-year balloon payment.

The agreement would also specify that the seller’s loan is secured by a lien on business assets and possibly a personal guarantee from the buyer. This kind of structure is one of the best examples of how sellers fill a financing gap while still exiting the business.

Example 2: Residential real estate with seller carryback note

In a tight credit market, some sellers agree to “carry back” part of the price. Say a home is selling for \(400,000. The buyer gets a \)320,000 mortgage but is short on the remaining $80,000.

A purchase agreement sample with seller financing in this context might state:

Seller agrees to finance $80,000 of the Purchase Price at 6.5% interest, interest-only payments for 3 years, with the entire principal due in a balloon payment on the third anniversary of the Closing Date.

The contract would also:

• Reference a separate promissory note and deed of trust or mortgage.
• Spell out late fees, default interest, and remedies.
• Clarify whether the buyer may prepay without penalty.

For U.S. residential deals, both parties should be aware of federal and state rules affecting seller financing. The Consumer Financial Protection Bureau (CFPB) provides guidance on mortgage-related rules and disclosures: https://www.consumerfinance.gov.

Example 3: Asset purchase of an online business with performance-based seller financing

Digital and online businesses often use performance or “earn-out” style seller financing. Suppose a buyer acquires an e‑commerce brand for \(1 million. The buyer pays \)500,000 at closing, \(300,000 via bank financing, and the remaining \)200,000 as seller financing tied to future revenue.

In this example of a purchase agreement with seller financing, you might see language such as:

Seller Financing: Up to \(200,000 payable over 3 years, contingent upon the Business generating at least \)1,000,000 in Gross Revenue per year. Buyer shall pay Seller an amount equal to 10% of Gross Revenue, payable quarterly, until the earlier of (i) payment of $200,000 or (ii) the third anniversary of Closing.

The agreement would define “Gross Revenue” in detail and grant the seller audit rights. Among examples of purchase agreement samples with seller financing, performance-based structures are increasingly common in the online and tech sectors, especially where future earnings are uncertain.

Example 4: Commercial real estate with interest rate adjustment

With interest rates moving rapidly in 2024–2025, some sellers are using adjustable-rate structures. Picture a \(2.5 million office building. The seller agrees to finance \)1 million over 10 years.

A purchase agreement sample with seller financing might say:

The unpaid principal balance shall bear interest at a rate equal to the Prime Rate as published in The Wall Street Journal plus 2.0%, adjusted annually on January 1 based on the then-current Prime Rate, provided that the interest rate shall not be less than 6.0% or more than 10.0%.

This example shows how parties can share interest rate risk. It also highlights why buyers should understand benchmark rates and caps. The Federal Reserve’s materials on interest rates and credit conditions can be a helpful reference: https://www.federalreserve.gov.

Example 5: Equipment purchase with seller financing and security interest

A small manufacturer buys \(250,000 worth of CNC equipment from a retiring owner who agrees to finance \)150,000 of the price.

In this example of a seller-financed purchase agreement, the contract might provide:

Seller Financing: $150,000 at 8% interest, payable in equal monthly installments over 5 years.

Security: Buyer grants Seller a first-priority security interest in the Equipment, as described in Exhibit A, and authorizes Seller to file a UCC-1 financing statement.

This example illustrates how seller financing often goes hand-in-hand with secured transactions under the Uniform Commercial Code (UCC). The Cornell Legal Information Institute offers accessible explanations of UCC concepts: https://www.law.cornell.edu.

Example 6: Franchise resale with seller financing plus non-compete

A franchisee sells a profitable fast-casual restaurant for \(750,000. The buyer secures \)500,000 via an SBA-backed loan and negotiates \(150,000 in seller financing, with \)100,000 in cash at closing.

In many examples of purchase agreement samples with seller financing involving franchises, you’ll see extra protections for the buyer, such as:

Seller Financing: $150,000 at 7.25% interest, amortized over 10 years.

Non-Compete: As additional consideration for the Seller Financing, Seller agrees not to own, operate, or assist any competing restaurant business within a 20-mile radius for a period of 5 years.

The purchase agreement also needs to reflect franchisor approval requirements and any transfer fees, which are often conditions precedent to closing.

Example 7: Seller financing with a due-on-sale clause and prepayment rights

Consider a land sale where the seller wants to prevent the buyer from flipping the property and leaving the seller stuck as a lender to a stranger.

A purchase agreement sample with seller financing might include:

Due-on-Sale: The entire unpaid principal and accrued interest shall become immediately due and payable upon any transfer of Buyer’s interest in the Property, whether voluntary or involuntary, without Seller’s prior written consent.

Prepayment: Buyer may prepay all or any portion of the outstanding principal at any time without penalty.

Among the best examples of seller-financed clauses, due-on-sale provisions are often non-negotiable for sellers who want control over who owes them money.

Example 8: Hybrid structure with seller financing and earn-out

In some sophisticated deals, parties combine a fixed seller note and an earn-out. Suppose a software company sells for \(5 million. The buyer pays \)3 million in cash, signs a \(1 million fixed seller note, and agrees to up to \)1 million in additional payments based on hitting EBITDA targets.

This example of a purchase agreement with seller financing might say:

Fixed Seller Note: $1,000,000 at 6.75% interest, payable in 20 equal quarterly installments.

Earn-Out: Up to $1,000,000 payable over 3 years, based on the Business achieving specified EBITDA thresholds, as set forth in Exhibit C.

This type of structure is common in M&A transactions where there’s uncertainty around customer retention or integration risk.

Key clauses to study in examples of purchase agreement samples with seller financing

When you review examples of purchase agreement samples with seller financing, a few recurring clauses deserve extra attention:

Purchase price and allocation

The agreement should clearly state:

• Total purchase price
• How much is paid at closing versus financed by the seller
• Allocation of price among assets (for tax reporting), especially in business and asset deals

The IRS provides guidance on asset allocation and reporting obligations (for example, Form 8594 for certain business asset sales): https://www.irs.gov.

Interest rate, term, and amortization

Most examples of purchase agreement samples with seller financing specify:

• Interest rate (fixed or variable)
• Length of the loan (term)
• Whether payments are interest-only, fully amortizing, or structured with a balloon payment

The payment schedule should be clear enough that both sides can calculate the exact monthly or quarterly obligations.

Security and collateral

In many examples of seller-financed agreements, the seller protects themselves by taking:

• A mortgage or deed of trust on real property
• A security interest in business assets or equipment
• Personal guarantees from individual owners

The purchase agreement should reference the separate security documents and make closing conditional on their proper execution and filing.

Default, remedies, and acceleration

Well-drafted examples of purchase agreement samples with seller financing almost always include:

• What counts as a default (missed payments, bankruptcy, failure to maintain insurance, etc.)
• Grace periods and notice requirements
• Seller’s remedies, including late fees, default interest, acceleration (making the entire balance due), and foreclosure or repossession rights

Representations, warranties, and covenants

Seller-financed deals often live or die on trust. That’s why examples include detailed representations and warranties about:

• Ownership of the assets or property
• Absence of undisclosed liens
• Accuracy of financial statements
• Compliance with laws and permits

Covenants may require the buyer to:

• Maintain insurance
• Keep the property or assets in good repair
• Provide financial statements to the seller during the financing term

2024–2025 trends shaping purchase agreement samples with seller financing

When you look at recent examples of purchase agreement samples with seller financing, a few trends stand out:

Higher interest rates and tighter credit

With bank lending standards tightening and rates still elevated compared to the late 2010s, more buyers are turning to seller financing to bridge gaps. Sellers, in turn, are often able to command higher interest rates than traditional bank loans, especially in small business and private real estate deals.

Increased use of balloons and shorter terms

Many 2024 and 2025 examples include shorter seller-financing terms (3–7 years) with balloon payments, particularly where both parties expect interest rates to change or the buyer to refinance later.

More documentation and compliance focus

Regulators continue to monitor non-bank lending practices. While seller financing is often exempt from some lending rules, parties are more cautious. Recent real examples show:

• More detailed disclosures
• Clearer interest and fee language
• Greater use of attorneys to draft and review documents

The CFPB and state regulators regularly update guidance and enforcement actions, so parties should check current rules in their jurisdiction.

Creative structures in online and service businesses

In service, tech, and online businesses, examples of purchase agreement samples with seller financing increasingly blend:

• Fixed notes
• Revenue-based payments
• Earn-outs tied to performance metrics

These structures can align incentives but also require very precise drafting to avoid disputes.

Practical tips for using these examples in your own agreement

Looking at examples of purchase agreement samples with seller financing is helpful, but copying them blindly is risky. To use these examples intelligently:

• Treat every example as a template, not a final answer. Laws vary heavily by state and country.
• Run tax consequences by a CPA. Interest, depreciation, and gain recognition can differ dramatically depending on structure.
• Ask your attorney to stress-test worst-case scenarios: buyer default, market crash, or regulatory changes.
• Document everything in the main agreement and supporting documents (promissory note, security agreement, mortgage, personal guarantees).

If you’re in the U.S., checking state bar association resources can help you find lawyers who routinely handle seller-financed transactions.

FAQ: examples of purchase agreement samples with seller financing

Q1: Can you give a simple example of a seller-financed home purchase?
Yes. A typical example of a seller-financed home purchase: The price is \(300,000. The buyer pays \)60,000 down, the seller finances $240,000 at 7% interest for 15 years, and the agreement states that the loan is secured by a mortgage on the property, with monthly principal and interest payments and a 10-day grace period for late payments.

Q2: What are the best examples of seller financing structures for small business sales?
Some of the best examples include: a fixed-rate note over 5–10 years with a lien on business assets; a hybrid note plus earn-out for businesses with volatile revenue; and a shorter-term note with a balloon payment where the buyer expects to refinance with a bank once the business shows stable post-sale performance.

Q3: Do real examples of seller financing usually include personal guarantees?
In many real examples involving small and mid-size businesses, yes. Sellers often require the individual owners of the buying entity to personally guarantee the seller-financed note, especially when the buyer is a newly formed LLC with limited assets.

Q4: Are there legal limits on interest rates in seller-financed purchase agreements?
Yes. Most U.S. states have usury laws that cap interest rates. When reviewing examples of purchase agreement samples with seller financing, you’ll notice that interest rates are typically set below state usury limits and sometimes reference those laws directly. Parties should check their state’s statutes and, when in doubt, consult a lawyer.

Q5: Where can I find more examples of purchase agreement samples with seller financing?
Publicly filed real estate documents at county recorders’ offices sometimes show seller-financed terms, and some state bar associations or small business development centers publish sample forms. Use those examples of agreements only as a starting point and have a professional adapt them to your deal.