Seller-note terms to discuss before closing a Canadian business deal

Name the amount and what it represents

Write down the proposed seller-financed principal separately from the full purchase price, buyer cash, and other financing. If the transaction also includes an earnout or a holdback, label those items separately rather than combining them into one balance.

Keep each proposal version dated. It should be possible to tell which amount was discussed, which was accepted in principle, and which appears in the signed documents. A discussion spreadsheet is not evidence that a proposed term has become binding.

Make repayment timing explicit

A monthly amount does not explain every part of a repayment plan. The parties should be able to identify the first payment, the payment frequency, the final maturity date, and any amount still outstanding at that date.

Ask the appropriate advisor to explain any interest convention, deferral, or prepayment provision that is unclear. Avoid copying the calculation method from an unrelated note. The agreement may require different treatment.

• Principal and currency.
• Proposed rate and how interest is calculated.
• First payment date, frequency, and scheduled amount.
• Any deferred, interest-only, or irregular periods.
• Amortization period, maturity date, and any remaining balance.
• The process for confirming an early payoff amount.

Bring other financing into the review

If another lender is part of the deal, the seller note should be reviewed alongside that financing. Ask the lender and counsel what restrictions, consents, or documentation need to be addressed. The answers belong in the deal record rather than in assumptions made by software.

Do not infer that a seller is first in line for repayment because the note is signed or because a document describes security. Priority and enforcement questions need transaction-specific legal advice.

Agree how ongoing information will be handled

The seller may want information about the business while the note is outstanding. Be precise about any reporting obligations the parties actually agree. A vague expectation of occasional updates is difficult to administer.

• Which reports or supporting documents are required?
• Who prepares them, and who is entitled to receive them?
• When are they due, and where are they stored?
• Who responds if a figure or document is disputed?
• Who records a change agreed by the parties?

Create a clear handoff from draft to signed terms

Before using a schedule operationally, have the parties and the relevant advisors confirm the source documents and the interpretation being used. Keep the approved schedule beside the signed note, with a record of who reviewed it.

Dealosure’s planned tools are intended to support that handoff. Candidate terms and illustrative scenarios would remain proposals until reviewed. The software will not determine a party’s legal rights, issue a default notice, or amend the agreement on its own.