The BizBuySell Small Business Community

  • Get Expert Advice

  •  • Find Local Service Professionals

  •  • Share Your Experiences

What happens if I sell my business and the new owner doesn't make his payments?

I'm selling my business, but in these hard times, I'm concerned about the buyer making his payments? Will I be liable in any way after the sale if payments by the new buyer are not made?

No User Photo

Answer This Question

max 5000 characters

Web Reference (optional)

e.g., ""

Review Community Guidelines

Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

Submit Your Answer
Answers (6)
No User Photo

We are financial consultants to a group of investors whom we have their consent to manage their funds which is in our custody for cooperation in joint venture business investments.

Our areas of interest include Property Development and real estate, Health Care, Education and training, Mining and exploration, Energy, oil and gas,Technology, Software development, Agriculture, Manufacturing, Finance Services and Leisure.However, all viable proposals within reason will be considered.

Funds shall be made available to you as a direct investment loan at 3% interest rate per annual for a period of 2 or 30 years depending on what you prefer. You may contact us if you have interesting investment proposal for possible business collaboration for our study.

We look forward to your reply to enable us provide you with details or you may visit our website.

Kindly acknowledge receipt of email.

Thank you.

Yours Sincerely
Jesse Peterson
phone: (980) 239-7539

Jun 13, 2017
Allan Mooney
Managing Director
Hennepin County, MN

Hi Eloise,

Can you clarify what kind of business you are selling? If its a business based on the web, the first thing I would personally recommend is NOT to transfer ownership of the domain/s unti or unless the final payment is made to you. Simply update the DNS for your buyer to whatever s/he requests, but limit it to just that. This assures you of keeping ownership at least of the domain, all other factors should be addressed by an experienced Attorney and/or broker.



Nov 14, 2010
Salvatore B. Urso
Florida Business Acquisitions, Co.


I want to underscore Don's comment about having the spouse sign the personal guarantee. The Buyer may try to get out of that; beware if that is the case. I've seen some serious game being played...

Good luck!

Aug 8, 2009
No User Photo
The BAF Group LLC

I agree with Jason; however, I would add that your Contract of Sale should be accompanied by a Security Note, both of which should be carefully crafted by an experienced business attorney. And the Security note should not only allow you to get the business back, but also contain personal guarantees for the Buyer and his/her spouse, so that you can go after them personally, should they default. Many times, if the Buyer is not making the payments, there is nothing left to get back, so personal guarnatees are key to trying to obtain the most protection, possible.

Those personal guarantees also make the Buyer understand you are deadly serious. If they think they can simply toss the keys back in and walk away, they have little to lose. And I would say that 30% down is the absolute least you want to take, up front.

Finally, is there Real Estate? If so, I would suggest you get all of your money out of the business, and only hold the note on the Property. And you want to be the first lienholder, because if there is a bank involved, they will always be ahead of you and if there is a default, the bank will end up getting all of the money.

But if you can all of your business money out in the beginning, and then the Buyer defaults on the payements for the Property, you at least have the tangible asset of the Real Estate to re-sell.

Aug 8, 2009
No User Photo
Small Business Underwriters

Assuming you are referring to a seller note, if the buyer defaulted, you would have the right to take the business back. You should secure your debt with the assets of the business (an attonorny can help you file a UCC).

Of course, you should require some level of cash upfront to ensure that even if the whole thing goes bad. 20% - 30% is typical, but get more if you can.

Best of luck!

Aug 8, 2009
No User Photo
Franchise Advisory Group

Eloise, are you concerned about the buyer making payments to you, or Vendors? If to you, then you can take the business back. If you are concerned about the buyer making payments to the Vendors, well that depends on the agreement of sale. If you are executing an Asset Purchase Agreement, the chances are you are not going to be liable for the Buyers non payments as of the day of closing. It might be a different story if you execute a Stock Purchase. Asset Purchase is the most common. I strongly urge you consult an attorney. Good Luck

Apr 4, 2009

Start a Discussion