Answers
How does seller financing work when buying a website?
Short answer: With seller financing you pay part of the price at closing and the rest to the seller over time, usually monthly with interest, under a written note. It lowers the cash you need upfront and keeps the seller invested in a smooth handover. Check that monthly profit covers the note payment with plenty of room to spare.
How does a seller note work?
You and the seller agree a price, you pay part of it at closing, and the rest becomes a loan from the seller to you, set out in a promissory note. The note states the amount, the interest rate, the monthly payment and the term, and usually what happens if you miss a payment. The assets transfer to you at closing, so you run the business while paying the seller from its profit.
For the seller, a note can mean a higher price and a continuing interest in a good handover. For you, it means less cash upfront and a seller who has reason to answer questions after the sale.
What terms are typical?
Terms are negotiated case by case, and we have found no reliable public source for typical rates or terms on small online businesses, so we do not quote any. What matters is the structure: how much is paid at closing, the rate, the term, and any security, such as the seller keeping a claim on the assets until the note is paid. Acquire.com's multiples report (updated 1 September 2026) notes that higher multiples may involve conditions such as earnouts or seller financing, while all-cash deals often trade simplicity for a lower headline price.
How do I check the business can carry the note?
Divide monthly profit by the note payment. In the composite below, an $80,000 site earning $2,500 a month is bought with $48,000 at closing and a $32,000 note over 24 months at 6%. The payment is $1,418 a month, profit covers it 1.76×, and $1,082 a month is left while the note runs.
Composite example, run through the seller financing calculator
| Price | $80,000 |
|---|---|
| Paid at closing | $48,000 |
| Note interest rate a year | 6% |
| Note term in months | 24 |
| Monthly profit | $2,500 |
| Monthly note payment | $1,418 |
| Profit divided by the note payment | 1.76× |
| Cash left each month while paying | $1,082 |
| Total interest | $2,038 |
| Everything you pay the seller | $82,038 |
| Months to earn back the closing payment | 32.8 months |
Coverage near 1.0× means a single bad month leaves you paying the seller from your own pocket. Test it against a fall in profit as well: if a 30% drop would push coverage below 1.0×, the note is too large or too short.
How is an earnout different?
An earnout pays the seller a share of future profit or revenue for a set period, instead of a fixed amount. It shares the risk: if the business underperforms, the seller receives less. Combined with a note, it can strain cash. In the composite below, the same site is bought with $56,000 at closing, a 12-month note for the rest, and 20% of profit to the seller for 12 months.
Composite example, run through the seller financing calculator
| Price | $80,000 |
|---|---|
| Paid at closing | $56,000 |
| Note interest rate a year | 6% |
| Note term in months | 12 |
| Monthly profit | $2,500 |
| Earnout: share of monthly profit paid to the seller | 20% |
| Earnout months | 12 |
| Monthly note payment | $2,066 |
| Profit divided by the note payment | 1.21× |
| Cash left each month while paying | −$66 |
| Total interest | $787 |
| Total earnout paid | $6,000 |
| Everything you pay the seller | $86,787 |
| Months to earn back the closing payment | 34.7 months |
Here the note payment and the earnout together exceed monthly profit, so you would be about $66 short each month for the first year, even if the business performs as listed. Change the terms in the seller financing calculator until the cash stays positive.
How do I protect the payments?
Pay the closing amount through escrow so it is released only after the assets transfer (how escrow works), put the note and any earnout in the written purchase agreement, define exactly how earnout profit is measured, and have a lawyer review both. The rest of the process is in how to buy an online business.
Sources
- Acquire.com, Biannual Acquisition Multiples Report (11 February 2026, updated 1 September 2026), read 7 October 2026
- FirstPass Memo, free buyer calculators, our own calculators; the formulas are on each page
Related
- Seller financing calculator
- How escrow works
- How to buy an online business
- Glossary: earnout
- Glossary of listing terms
- More questions buyers ask
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Composite examples are invented and labelled. Figures from other sites are quoted with a link and the date we read them; FirstPass figures are asking prices and seller-stated profit, not sale prices. Informational screening only, not investment, legal or tax advice.