When owners hear an offer, they hear the price. Experienced sellers listen for the structure: how much arrives at closing, how much is paid later, what it depends on and what protections come with it. Two offers with the same price can be worth very different amounts to you.
Asset sale or stock sale
Most Main Street transactions are asset sales: the buyer purchases the business assets and goodwill rather than the company itself. A stock sale, where the buyer acquires the entity, is sometimes needed when leases, franchise agreements, licenses or customer contracts cannot be assigned. How the price is allocated across assets affects taxes for both sides, so involve your CPA early.
The usual building blocks
- Cash at close. Often 70% to 90% of the price, typically funded by the buyer's equity plus an SBA or bank loan.
- SBA loan. SBA 7(a) loans fund a large share of Main Street deals. Buyers generally inject at least 10% of the project as equity.
- Seller note. Often 10% to 30% of the price, paid to you over time with interest. A seller note signals confidence and can bridge a valuation gap. In SBA deals it may need to sit on standby for a period.
- Earnout. Typically 5% to 20%, tied to future results. Useful when a buyer worries about performance risk, but it should be used sparingly and defined very carefully.
- Escrow holdback. Commonly 5% to 15% held for 12 to 18 months after closing to cover potential claims.
- Transition and consulting. Most sellers train the buyer for a few weeks after closing. The hours, duration and scope should be written down.
Example: a seller needs one million dollars, but the lender supports eight hundred thousand. A two hundred thousand dollar seller note can close the gap and keep the deal moving.
Negotiate the package, not one number
Good negotiations trade across terms. A slightly lower price with more cash at close and a shorter holdback can be worth more than a headline number full of contingencies. Your advisor's job is to compare offers side by side on price, structure and the buyer's real ability to close, then negotiate a structure both sides see as fair.
Before you go to market, it pays to know which terms matter most to you: maximum cash at close, a clean exit, a role after the sale or protection for your team. That clarity makes every offer easier to judge.
Want to apply this to your business? Request a free saleability assessment or book a confidential call.
