Interesting Article About Seller Financing
During the last few years, I’ve heard about a number of people offering seller financing on their domain name deals. If a buyer can’t pay for a domain name purchase entirely up front, and he doesn’t wish to seek a more traditional financing option like Domain Capital (or doesn’t qualify), seller financing may be an option.
There are a number of advantages to self financing a deal, and there is also a fair amount of risk involved for both parties. Inc. Magazine has an article about seller financing, and I think it’s a good read if you’ve ever considered this option when selling a domain name.
I self-financed one deal, and it hasn’t turned out as great as I hoped. The plus side was that after the first payment was received, the deal was profitable for my company. The downside is that the buyer hasn’t paid off the purchase yet, despite passing the final payment date last month. The buyer is an end user who has a small business, and I felt guilty about demanding payment. He has promised payment in Q1.
Self financing can be a decent option to close a domain sale, but you should know the risks and weigh them against the advantages.
Thanks to Lonnie for sharing.
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