The Seller Financing Pitch
Turn a bank rejection into a win-win deal the seller prefers.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 90%
Seller financing means buying a business using a portion of its future revenue and earnings rather than a bank loan. Sanchez notes about 60% of businesses are bought with some seller financing, and once she learned to pitch it as a win-win, her acceptance rate roughly doubled. The pitch first uses a bank valuation as a neutral third party to reset the owner's inflated price, then stacks benefits: a higher headline price, interest paid to the seller instead of the bank at a lower rate, better tax treatment via installment payouts, and a faster 30-day close versus 120 days. Crucially it only works after building trust — she compares it to dating rather than a first-coffee proposal.
Origin
Sanchez refined the pitch across many acquisitions and her community's deals, documenting three seller-financing graphs and 21 creative financing methods in Main Street Millionaire.
Core principles
- 01Buy a business using a portion of its own future revenue and earnings
- 02Introduce a third party (the bank valuation) to reset seller expectations
- 03Stack the seller's benefits so the financed option beats an all-cash bank deal
- 04Build trust first — treat the deal like dating, not a cold offer
How to run it
- 1
Build trust first
Spend time getting to know the owner and understanding the business before ever proposing terms — do the 'early stages of dating' before asking for the deal.
Pro tip Get the seller to believe the business is better in your hands than anyone else's.
Watch out Don't run around offering '$0 down' to strangers; it destroys credibility.
- 2
Anchor with the bank valuation
Take the business to a bank, then tell the owner the bank only values it at, say, $1M against their $2M ask, using the third party to reset expectations.
Pro tip Let the bank, not you, be the one saying the price is too high.
- 3
Lay out the all-cash downsides
Show that a bank deal means a lower price, 8% interest to the bank, a 90-120 day wait, and a higher tax burden from a lump-sum payout.
- 4
Present the stacked seller-financing offer
Offer a higher price (e.g. $1.5M vs $1M), pay the seller the interest at a lower 4% rate, close in ~30 days, and structure payouts over time for long-term capital gains treatment.
Pro tip Frame every term as a 'plus' the seller gains versus the bank route.
- 5
Ask for the conversation, not the signature
Close by asking whether they'd be interested in discussing what that structure could look like, lowering the pressure to a yes.
Pro tip A soft ask ('would you be interested in at least discussing it?') gets a much higher yes rate.
In the wild
Sanchez scripts a full conversation: the owner wants $2M, the bank values it at $1M, so she offers $1.5M via seller financing with 4% interest paid to the seller, a 30-day close, and installment tax treatment.
→ The seller nets more money and better terms than an all-cash bank deal, and is likely to say yes.
After learning to pitch seller financing as a genuine win-win, Sanchez says her ratio of owners accepting seller financing went up about 100%.
→ Roughly twice as many sellers agreed to finance their own sale.
Common mistakes
Pitching terms before trust
Throwing out offers before building a relationship makes you look like an opportunist and kills creative deals.
Failing to reset the seller's price expectation
Owners usually overvalue their business; without a neutral third-party anchor, negotiations stall.
Is it for you?
Best for
Buyers acquiring businesses from owners nearing retirement without large capital.
Not ideal for
Cold buyers throwing out offers before building trust, or sellers needing all cash immediately.
From the transcript
“once I understood how to pitch seller financing properly so that it was a win-win our ratio of people taking seller financing went up about…”
“you have to treat a business transaction kind of like treating a dating transaction with a woman you got to get her to trust you”
From the episode
Codie Sanchez: How to Make Extraordinary Wealth Buying Boring Businesses
Codie Sanchez