Donna Genie explains seller financing for studio sales when buyers can't get traditional bank loans. The buyer pays the seller directly with interest and principal instead of going through a bank, but the seller takes on real risk.
Are you considering selling your studio but worried about a buyer being able to get the financing? Well, another option for you to consider is seller financing. It doesn't go without its own risks. So let's talk about the pros and cons of selling your studio with a seller financing option. Initially, the seller reasoning might be that it's very difficult to get an SBA loan or a bank loan traditionally because interest rates are so high. Currently, SBA loans are probably running between 10 to 12% now. Plus they tack on a whole lot of fees, and it's a very difficult process to go through the underwriting. It takes a long time, so there may be a roadblock in your way. What will happen is that the buyer, instead of paying the bank on the note, will pay you. That payment will include interest as well as some of the principal on the sale amount.
