{"ok":true,"canonical_url":"https://dealroom.so/glossary/contingent-seller-financing","api_url":"https://dealroom.so/api/public/glossary/contingent-seller-financing","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"contingent-seller-financing","term":"Contingent Seller Financing","aka":"Earnout, Performance-based seller note","group":"Your money in the deal","definition":"This is a seller note where repayment is tied to the future performance of the business. If the business doesn't meet specific targets, the seller may not get paid.","what_it_means":"The SBA views this as an Earnout or Seller Note. For SBA 7(a) loans, seller financing must typically be on \"full standby\" or \"partial standby\" for the life of the loan. Contingent payments are usually not allowed to impact the buyer's ability to repay the SBA loan.","url":"https://dealroom.so/glossary/contingent-seller-financing","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"earnout","term":"Earnout","url":"https://dealroom.so/glossary/earnout"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"partial-standby-agreement","term":"Partial Standby Agreement","url":"https://dealroom.so/glossary/partial-standby-agreement"}],"related_questions":[{"question":"Does the SBA 7(a) loan program allow for seller training period financing?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-7-a-loan-program-allow-for-seller-training-period-financing"},{"question":"How does seller financing structure impact the required equity injection for a business acquisition?","url":"https://dealroom.so/for-lenders/questions/how-does-seller-financing-structure-impact-the-required-equity-injection-for-a-business-ac"},{"question":"What specific due diligence is required for seller financing in a change of ownership?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-seller-financing-in-a-change-of-ownership"},{"question":"What specific due diligence is needed for seller financing that is not on full standby?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-needed-for-seller-financing-that-is-not-on-full-standby"},{"question":"How much of my equity injection must be cash, rather than other assets or seller financing?","url":"https://dealroom.so/sba-7a/questions/how-much-of-my-equity-injection-must-be-cash-rather-than-other-assets-or-seller-financing"},{"question":"Does the SBA 7(a) loan program allow for seller training period financing for the buyer?","url":"https://dealroom.so/sba-7a/questions/does-the-sba-7-a-loan-program-allow-for-seller-training-period-financing-for-the-buyer"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Contingent Seller Financing","url":"https://dealroom.so/glossary/contingent-seller-financing","source_type":"DealRoom Data"}}