You’re buying a restaurant. While many buyers turn to bank lending, there could be several reasons why this may not be right for you. For example, perhaps you are concerned about interest rates or fees associated with lending. Maybe you want to structure the note differently, in order to build earnings. An SBA loan is a flat amortization over ten years while you may be looking for a note amortized over 20 years with a balloon payment at the end of five. You may have a credit issue that’s in the past but still dragging down your FICO score or married to a spouse with this issue. Any of these can be reasons to seek seller financing instead of traditional bank lending for buying the restaurant.

Seller financing might be your smartest move and it’s exactly what it sound like. e: instead of going through a bank, the seller acts as your lender.

That means you pay less out of pocket, skip the lengthy bank approval process, and gain a valuable partner—because now the seller has a financial interest in your success.

But seller financing isn’t automatic. Not every seller will say yes, and not every deal qualifies. So, here are 10 expert strategies to increase your odds of landing a seller-financed deal. 

Tip #1:  Always Ask for Seller Financing – What’s the Worst they Can Say?

The other little-known fact is that any amount of seller financing is treated as part of the down payment by the lender if you are getting an SBA loan. They view this as a capital contribution to the deal. That means that if you are buying for $300,000 and bring 10% or $30,000 as a down payment and the seller holds a note for $30,000, they view this as a 20% down payment lowering their risk and making the loan decision much easier.

At the same time, avoid making a ridiculous offer. As Certified Restaurant Brokers, we routinely handle inquiries where a buyer asks for 100% financing and no money down. I have never seen one accepted. Some seller financing may be reasonable, but 100% seller financing is not. Also, make sure you ask the question since most listings won’t advertise seller financing, but the owner may be open to this idea with the right buyer.

Tip #2:  Build a Relationship Before Requesting Seller Financing

Seller financing is based on trust. If you have never met the owner in person or by phone and he knows very little about you, they are unlikely to provide you with a loan. On the other hand, if there have been several respectful interactions, the likelihood goes up. That’s why you should spend time actively listening, asking smart questions, and showing genuine interest in the restaurant business. Then the seller is more likely to see you as someone worth investing in.

This strategy also helps you understand the seller’s motivation for selling. While many sellers will say they are “retiring,” some time spent with the owner may reveal whether he’s looking to be in Florida by Spring or if he’s already bought the motor home to go on the road. This gives you insight into his timetable and may help you put the right offer in place. Overall, sellers are interested in two outcomes – time and money. If you can flex to his timing, that may overcome your ask for financing support to make the deal work. Overall, this isn’t just about paperwork; it’s about building rapport.

Tip #3:  Understand and Reduce Seller Risk When Buying a Restaurant

When a seller says “no” to financing, it’s usually because they’re imagining worst-case scenarios. Will the buyer default? Will the restaurant tank under new ownership? Will he lose his equipment if you don’t succeed?

Your job and the job of your Certified Restaurant Broker is to listen, understand a seller’s concerns, and propose solutions. In almost all instances, a restaurant buyer should be prepared to offer a personal guarantee which gives greater security to the restaurant seller. In addition, plan on a UCC lien being placed on the business until the note is paid off. Providing references or a credit report that demonstrates on time payments to vendors is very helpful. These are strategies that “de-risk” the deal for the seller and makes him more likely to say yes.

Tip #4:  Pay the Asking Price When Asking for Financing

When negotiating for a restaurant, there are really two things important to the seller. One is price of the restaurant. The second is timing of the deal. If you are asking for seller financing, it’s best to be very close to the asking price. If you ask for both items, you may be perceived as being aggressive or disrespectful.

You can still negotiate terms to be favorable to you, even if you are paying a slightly higher price overall or higher multiple than you intended. Negotiating a favorable interest rate or a longer repayment window are both strategies that overcome any additional valuation Not having to pay loan origination fees, guarantee fees, and wait on the financing approvals and paperwork can make it worth paying more for the deal.

Consider all the possible strategies for financing the deal including, amortizing over a longer period for a lower payment with a balloon at the end (a larger payoff). You can try deferring payments at the outset to give you time to grow the business and the cash flow. Overall, everyone needs to feel a win in the negotiation. You get owner financing and flexibility. They get their number. Everyone walks away satisfied.

Tip #5:  Develop a Business Plan

You can’t get traditional bank lending or SBA lending without a business plan, and owner financing this should be treated the same way. Share your transition plan, operating vision, and financial projections and your menu, especially if you are making any changes.

Include all your background and experience. Provide references, especially if you’ve managed operations for other restaurant owners. Demonstrate that you are responsible and know how to manage the full operations. At the same time, be humble and ask the seller’s opinion. You want him to be part of the discussion, and this will help overcome some barriers.

Overall, be prepared to answer: Why are you the right person to take this restaurant forward?

A well-thought-out presentation builds confidence—and can make the seller more willing to finance part of the deal.

➡️Tool for Creating a Restaurant Business Plan

Tip #6: Include Throwaway Terms

Sellers like to feel like they’re negotiating a win. One way to do this is to include some “throwaway” terms. These are items you are willing to concede later. Maybe you offer a higher interest rate initially or propose additional collateral, then agree to remove them during negotiations. Be aware that the seller may offer throwaway terms as well, like additional training or consulting services after the sale.

These are small gestures that build goodwill and get deals across the finish line.

Tip #7: Have a Fallback Position

What if your initial offer for buying the restaurant is declined? Be ready with a second offer. Maybe the seller won’t do five years at 7%, but they might agree to three years at 9% if the note is personally guaranteed. Your Certified Restaurant Broker will help you establish strategies to get to a successful negotiation.

Above all, remain flexible. Showing flexibility keeps the conversation going, and signals that you're serious about making the deal work.

Tip #8: Lead with Understanding, Not Jargon

Throwing out financial terms and seller-financing stats won’t build trust. A former investment banker trying to offer deal terms and throwing out terms like basis points, won’t win the deal. What will? Listening. Start by asking what concerns the seller most about offering financing, then tailor your offer to resolve that specific issue.

Remember: knowledge is knowing the terms. Wisdom is knowing when and how to use them.

Tip #9:  Get Creative with the Deal Structure

Seller financing isn’t one-size-fits-all. If a seller is hesitant, propose options like:

• Interest-only payments for the first year
• A balloon payment at the end of the term
• A phased ownership transfer
• Performance-based incentives, for example, bonuses if revenue targets are hit.

Flexibility increases the chance of finding a deal that works for both parties.

Tip #10: Use a Certified Restaurant Broker to Guide the Deal

Working with a Certified Restaurant Broker can make all the difference. Brokers understand how to structure seller financing deals that protect both parties—and they often know how to position the ask in a way that resonates with sellers.

They’ve been through this before, and that experience brings real value to your negotiations.

➡️ Find a Certified Restaurant Broker

Final Thoughts

Seller financing isn’t guaranteed, but it’s a game-changer when it works—less cash upfront, more collaboration, and a seller rooting for you. With preparation, persistence, and a personal touch, these 10 tips can turn a “no” into a handshake. Ready to buy that restaurant? Start asking, start listening, and start winning.