Why People Buy and Sell Seller Financed Notes

Reasons Why Business Promissory Note Buyers Would Want To Buy Seller Financed Notes

1)  Business promissory note buyers are in the business of investing in seller financed business notes.

2)  Note buyers earn money from the note purchase from the note interest rate and the discount of the initial note purchase if the note is carried out and paid upon for the full term of the note.

3)  Because of the discount applied to the original note purchase transaction, note buyers still earn money from the note purchase even if the note payer were to pay off the balance of the business note principal.

4)  Money can still be earned by the business note buyers even if the note payer were to default on the note since a business note buyer could foreclose on the business and resell it for a profit.

Reasons Why Business Note Holders Would Want To Sell Their Seller Financed Notes

1)  The business note holder no longer wants to be managing the collection of payments on the note.

2)  The note holder no longer wants to be worried about the headache of having to deal with late payments from the note payer and with the possibility of a default on the note.

3)  A lump sum of cash in a couple of weeks could be more desirable than receiving many small payments over several years.

4)  Cash up front from putting up a business note promissory note for sale could be used for personal reasons such as paying off debts, using the cash towards towards a new house, or purchasing a new car.

5)  Up-front cash from a business promissory note sale could possibly be used to earn a greater return on investment than would otherwise be earned from just holding on the note and earning money from the interest.

Related Articles:

Definition of Business Note

What exactly is a business note anyway?

Seller Financing

Find out the role that seller financing  plays in the creation of a business promissory note.

How To Sell Business Note Payments

Learn the process for selling business note payments.

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Buying And Selling Of Seller Financed Notes