Turn future payments into cash — fast.
You sold your business. The buyer didn’t pay the full price upfront. Instead, you gave them time. Maybe 5 or 10 years. They’re paying you every month.
This is called a business note.
It’s basically a loan from you to them. But what if you want the money now instead of waiting years? That’s where selling a business note comes in.
Let’s break it down in simple steps.
Table of Contents
First, What Is a Business Note?
When someone buys a business but doesn’t pay all the money at once, they usually sign a promissory note.
That note is a legal agreement. It says how much they owe, how often they’ll pay, how much interest you’ll earn, and for how long. This agreement becomes an asset.
And yes — you can sell that asset.
Selling a business note means you transfer the right to collect those future payments to someone else — in exchange for a lump sum now.
Why Would You Sell a Business Note?
There are a lot of good reasons.
- You need money right now
- You want to pay off debt
- You’re retiring and want to simplify
- You want to reinvest in real estate or another venture
- You just don’t want to wait years for your money
Waiting 10 years to get your full payment may not be worth it. Life changes. Priorities shift. If you need money sooner, selling your note could be the right move.
But You Won’t Get the Full Value
Let’s be upfront. You won’t get the full unpaid balance. Why? Because buyers of notes are investors. They want a return.
So instead of paying you $200,000 in future payments, they might offer $160,000 or $170,000 now. That difference is called a discount.
The size of the discount depends on the risk and terms of your note.
Step 1: Review the Note Details
Before anything else, gather the documents. Buyers will want to see:
- The promissory note
- A copy of the business sale agreement
- Proof of payment history (if any)
- The buyer’s credit profile (if available)
- A UCC filing or collateral details (if secured)
The better your paperwork, the smoother this process will go. Can’t find something? Ask your attorney or the title company who helped with the sale.
Step 2: Understand the Value of Your Note
Not all notes are worth the same. Here’s what affects the price:
- Down payment: Higher down payments make the note safer and more valuable.
- Credit score of the business buyer: Good credit = less risk.
- Payment history: If they’ve been paying on time, that’s a big plus.
- Remaining term: Notes with fewer years left are more attractive.
- Interest rate: Higher interest makes it more appealing to note buyers.
- Security: Is the note backed by the business assets? Or is it unsecured?
A note from a reliable buyer, with a good down payment and clean history, will get better offers.
Step 3: Decide If You Want to Sell the Full Note or a Part
You don’t always have to sell the whole thing. You can sell a portion of your business note. For example:
- Sell just the next 36 payments
- Keep the final balloon payment for yourself
- Sell half now and half later
This gives you cash upfront and some future income too. Talk to note buyers about flexible options.
Step 4: Shop for Buyers
Now it’s time to find someone who buys business notes.
Look for:
- Private investors
- Note buying companies
- Financial brokers who specialize in small business notes
Search online. Ask for referrals. Try investor forums or LinkedIn. But be smart. Don’t go with the first offer. Get multiple quotes. Compare the numbers.
Ask them to break down the fee or discount they’re taking. And always ask questions if you’re unsure. A good buyer won’t rush you.
Step 5: Complete Due Diligence
Once you agree to sell, the buyer will do their homework. They’ll check:
- The original business sale contract
- Payment records
- The buyer’s credit and business health
- UCC filings or liens
- The note terms
This process usually takes a week or two. Sometimes longer. They want to confirm everything is legit. That the payments are likely to continue. That they’re not walking into a mess.
You may also be asked to sign a few new papers to finalize the sale.
Step 6: Get Paid
Once the buyer approves everything, you’ll get your money. Usually by wire transfer or check. That’s it.
You’ve sold your business note. You’ve traded years of waiting for money in your hands today. Now what you do with it is up to you.
What If the Buyer Stops Paying?
That depends on the agreement between the note buyer and the business buyer. Once you sell the note, it’s their responsibility — not yours. Still, if the note wasn’t secured, or if the business buyer is unstable, it could reduce the value of your note at sale time.
That’s why note buyers do due diligence before buying anything. And it’s why solid paperwork and payment history matter so much.
Tips to Get the Best Price
Want to get more money when selling a business note? Do this:
- Make sure your documents are complete and easy to read
- Show proof of payments received so far
- Offer a note with a solid interest rate (6% or more is better)
- Work with buyers who specialize in small business notes
- Be honest about the business’s performance
- Avoid selling in a rush — if you can wait a week, you’ll get better deals
When Should You Sell a Business Note?
Here are a few common times people choose to sell:
- After a few payments are made
- When they need quick cash
- During a market downturn
- Before retirement
- To remove risk from their portfolio
There’s no perfect time. It depends on your goals and your situation.
Final Thoughts
Selling a business note is a smart way to turn future payments into upfront cash. It’s not complicated — but you do need to understand what you’re giving up.
You’re trading long-term income for money today. That trade can be worth it, especially if you need funds now or want to move on.
Make sure your documents are in order. Shop around. Ask for real numbers. Don’t get pushed. A well-prepared seller almost always gets better offers.
And once it’s done, you can use that money for anything — new investments, paying off debt, or just peace of mind.