Sell Your Business Note and Get Cash Fast
To sell your business note, you have to know what a business note is. A business note, also known as a promissory note, is a legal financial agreement in which the seller of a business provides financing to the buyer—essentially acting as the lender. It is a written promise to repay a specified amount over a set term, usually with interest. Business notes are common when a buyer can’t secure full financing from a traditional bank or lender.
When you sell a business note, you transfer the right to receive those future payments to another party, often an investor or company, in exchange for a lump sum of cash today. This process can provide immediate liquidity and eliminate the risk of late or missed payments.
Understanding a Business Note
1. Seller Financing
Instead of obtaining a loan from a bank, the buyer pays part of the purchase price upfront and finances the rest directly with the seller.
2. Promissory Note Details
The promissory note outlines:
Amount owed
Interest rate
Repayment schedule
Collateral (if applicable)
3. Business Sale Context
Business notes are typically created during an asset sale, representing a portion of the agreed purchase price.
Example: If a business sells for $300,000 and the buyer puts down $100,000, the remaining $200,000 could be financed through a business note.
How to Sell a Business Note
1. Find Qualified Note Buyers
Specialized investors and companies purchase business notes, often at a discount, to earn a return on future payments.
2. Work With a Business Note Broker
A broker can connect you with vetted buyers, negotiate the best offer, and manage the closing process.
3. Prepare for Due Diligence
Buyers will review the promissory note, payment history, and business performance to assess risk.
4. Understand the Discount Factor
Because of payment risk and the time value of money, notes are usually sold for less than the principal balance.
Example: A $200,000 balance may sell for $180,000, giving the buyer room for profit.
5. Gather the Right Documents
Commonly required documents include:
The original promissory note
Asset purchase agreement
Payment history records
6. Season Your Note
Notes with 3–6 months of consistent, on-time payments (known as “seasoning”) are more attractive and can fetch higher offers.
Why Sell Your Business Note?
Selling your note can:
Provide immediate cash for new investments
Eliminate collection risk
Simplify your finances
Free up capital for growth opportunities
Sell Your Business Note to First Capital
At First Capital, we are a nationwide buyer of business promissory notes. We work directly with:
Individual note holders
Brokers
Business owners
We offer fast evaluations, competitive offers, and a smooth closing process. Whether you have a seasoned note or one that’s brand new, we can help you turn future payments into cash today.
Contact us now for more information and to get your free, no-obligation quote.