How to buy a business with no money down reduces to one negotiation: getting the seller to carry, as a note, exactly the gap between the price and what the bank will lend. Everything else follows from that number. This page works the negotiation as arithmetic, using the free calculator on this site to show what a seller note sized to the gap does to the buyer's cash, the monthly payment and the coverage, and notes the one thing the buyer must still agree with the seller after the money is settled.
Sizing the note to the gap
If the bank funds 80% of a $450,000 price, the gap is $90,000, which is a 20% seller note. On the calculator that sets the buyer's cash on the price to zero. The seller is being asked to lend a fifth of their own sale price back to the buyer, so the offer that carries it needs the buyer's credibility written down: the funding stack, the coverage and the transition plan.
What the note costs the buyer
At 6% over 5 years a $90,000 seller note costs $1,739.95 a month, twice the worked example's $869.98 for a 10% note. The year's debt service rises from $68,731.68 to $79,171.32 and coverage on $90,000 of earnings after the buyer's pay falls from 131% to 114%. The buyer has traded cash today for a thinner year one, and the sheet shows the trade before the seller does.
The thing left to agree
With the money settled, the price still has to be allocated across the assets for both sides' returns, and a seller carrying a note has a keen interest in that split. Agree it in the purchase agreement, alongside the note's own terms: rate, term, security and what happens if a payment is missed. The register in Pro keeps the note's terms with the target so they are not rediscovered at closing.
Questions people ask about how to buy a business with no money down
Will a seller carry 20%?
Some will, for a credible buyer and a price they want. Others will carry 10% and want the buyer to find the rest. The sheet lets you show them each version's payment.
Does no money down include working capital?
No. The phrase is about the price. Working capital and closing costs, $40,000 and $25,000 on the example, are still cash on the day.
Can the seller note be interest only?
Terms are whatever both sides sign. The calculator assumes a level 5 year amortisation; an interest-only period lowers early payments and leaves a balloon.