Break the offer into payment types
Separate cash at closing, a seller note, an earnout, and any retained ownership. A note is a promise to repay under agreed terms. An earnout usually depends on future results. Neither is the same as cleared funds at closing.
Identify holdbacks and adjustments too. Write down what can reduce or delay a payment and who controls the information used to calculate it.
Review a note as a credit decision
Ask about the buyer’s own investment, operating plan, and other debt. Have counsel review security, payment priority, guarantees, default remedies, and any lender restrictions.
A lien does not remove the possibility of loss. The business could underperform, and another creditor may have priority. Decide how much ongoing exposure fits your plans.
Model what you can actually keep
Build a closing estimate that includes business debt, transaction expenses, taxes, and cash retained or left in the operation. Have your CPA model the timing and character of receipts.
If a buyer uses bank financing, understand the conditions still outstanding. A claim that a lender is interested is weaker than a documented funding process.
Negotiate the package rather than one number
Payment certainty, transition duties, security, and price interact. You may value a clearer exit more than an increase tied to future performance.
A valuation conversation can help you establish a starting point. Keep your advisors involved when an offer turns that value into specific payment obligations.
Continue your sale preparation
Request a business sale introduction when you are ready to discuss your company.