Seller note calculator
This calculator lets you model a seller note: monthly payments, total interest and a comparison between amortizing and bullet structures.
The seller note is the part of the price the buyer pays over time with interest after closing; in Mexican SMEs it helps close valuation gaps and align incentives.
Agreement parameters
Set the note principal in MXN, annual interest rate, term in years and whether payments are amortizing or bullet. For context, see the glossary entry for seller note.In Mexico 2024–2025 typical reference ranges: conservative (rate 8–10%, term 4–5 years, bullet), standard (10–12%, 3–4 years, amortizing), seller-favorable (12–15%, 2–3 years, monthly amortizing). conservative (rate 8–10%, term 4–5 years, bullet), standard (10–12%, 3–4 years, amortizing), seller-favorable (12–15%, 2–3 years, monthly amortizing). Adjust the sliders for the scenario you want to explore.
Principal and interest in equal monthly installments
How do amortizing and bullet structures compare for your seller note?
Same total interest in both structures; the difference is when you recover principal and how much counterparty risk you have at maturity.
| Concept | Amortizing (MXN) | Bullet (MXN) |
|---|---|---|
| Monthly payment | 226,666.67 | 60,000.00 |
| Final payment (principal) | — | 6,000,000.00 |
| Total interest received | 2,160,000.00 | 2,160,000.00 |
| Total received | 8,160,000.00 | 8,160,000.00 |
| Exposure at maturity | Low | High |
In a real transaction, an amortizing note with the same term and rate as a bullet generates slightly less total interest; here we prioritize comparing the shape of flows and risk.
Choose amortizing for lower exposure at maturity; bullet if you prefer lower monthly payment and accept counterparty risk at maturity.
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What do buyers and sellers ask about the seller note?
- What deal size is a seller note suited for?
- In Mexican SME transactions, the seller note typically covers 10% to 40% of the purchase price. Below that range it barely moves the needle in negotiation; above it, the counterparty risk you take as seller becomes hard to justify if the buyer does not have enough equity.
- Which structure is safer for the seller: amortizing or bullet?
- For the same rate and term, an amortizing structure reduces your exposure because you recover principal in each payment and the outstanding balance decreases over time. A bullet structure concentrates risk at maturity: you receive interest periodically but depend on one large principal payment, so default risk at that date is higher.
- How to use this calculator before signing a LOI?
- Before negotiating your LOI, model two or three combinations of term, rate and structure with this calculator and compare how monthly payments, total interest and your exposure at maturity change. Come to the negotiation with a range of terms you have already tested in numbers and that feel reasonable to you as seller.
What other tools and guides to check?
Modeling term, rate and structure before negotiating the LOI helps limit the risk you take as seller. To see how the note fits with cash at closing and contingent tranche, see the guide Seller note in Mexico: how to structure it step by step.
Sources
- Morgan & Westfield. "M&A Seller Financing: A Complete Guide." 2023. Morgan & Westfield. Available online.
- Advisor Legacy. "How to Structure a Seller Note: Smart Seller Financing for Buying a Business." 2022. Advisor Legacy. Available online.
- Davis Wright Tremaine LLP. "How Seller Financing Can Get a Deal across the Finish Line." 2020. Lexology. Available online.