The Buyer Ran Out of Money. Here’s Why You Should Have Financed the Deal Yourself

Here is the moment nobody warns you about. You’ve got a clean practice, a fair price, and a buyer who loves the office. Then the bank comes back and says the loan is short by $150,000 — and the whole deal is about to die over a gap that’s smaller than one operatory’s annual production.

Most sellers panic and drop the price. The 1% do something different. They finance the gap themselves — and walk away with more total money, a higher sale price, and a smoother transition than the all-cash buyer ever could have delivered.

This is seller financing. It’s one of the most misunderstood levers in a dental practice sale, and it’s quietly the difference between a deal that closes and a deal that dies on the table.

What is seller financing on a dental practice?

Seller financing (also called a “seller note” or “holding paper”) means you, the seller, act as part of the bank. Instead of the buyer handing you 100% cash at close — money that came entirely from a lender — the buyer pays you a chunk up front and signs a promissory note to pay the rest, with interest, over a set number of years.

On a Bulletproof podcast conversation about deal structure, Pete Boulden put the mechanics bluntly: a seller note is, at its core, “essentially just a 7% bond. It’s owner financing — that’s the only way to put it down.” You’re not gifting anything. You’re becoming a lender with a contract, a rate, and collateral.

A typical structure looks like this:

• 60–90% cash at close — usually from the buyer’s bank loan and down payment.
• 10–40% carried by you as a seller note — paid monthly over 3 to 7 years.
• Interest on that note — often in the 6–10% range, which is real income you’d never see in an all-cash deal.

Why would any dentist finance their own buyer?

Because the math is better than sellers think — and because it fixes the single biggest reason clean deals collapse: the financing gap.

Pete has hammered a point on the show that reframes every valuation conversation: a CPA’s paper valuation is often “85 percent of top-line revenue, because that’s what a bank is willing to lend sub-one-million-dollars.” In other words, the bank — not the market — is quietly capping your price. The lender’s appetite becomes your ceiling. Seller financing lets you break through that ceiling, because you’re no longer waiting for a third party’s permission to close.

Three concrete reasons the 1% hold paper:

• It closes deals a bank kills. When the loan comes up short, your note bridges the gap instead of you slashing the price. You’d rather earn 8% on $150K than give up $150K entirely.
• It raises your effective sale price. Buyers pay more for flexible terms than for rigid all-cash demands. A slightly higher price plus interest income routinely beats a lower all-cash number.
• It signals confidence — and gets it paid back. When you’re willing to carry a note, buyers trust the practice is real. And a seller who holds paper stays motivated to make the transition succeed, because their own money is riding on the buyer’s success.

What are the risks of holding a seller note?

Let’s be defiant about one thing: seller financing is a tool, not a religion. It cuts both ways, and pretending otherwise is how good dentists get burned.

The core risk is obvious — if the buyer fails, your note is at risk. You’ve handed over the practice and you’re relying on the new owner to run it well enough to pay you. That’s why Pete’s constant refrain on structure applies here: reverse-engineer the deal. As he framed it on the pod, you have to work backwards — “this is the cash at close, potentially all I’m left with, X in the bank” — and then compare that to the cash flow of simply continuing to own the business.

Protect yourself like a lender, not a hopeful seller:

• Take a personal guarantee. The note is backed by the buyer personally, not just the entity.
• Secure it against the practice assets. If they default, you have a legal path to step back in.
• Vet the buyer’s operating ability, not just their credit. A great clinician who can’t run a P&L is a default waiting to happen.
• Get a real down payment. A buyer with meaningful skin in the game fights to succeed. A buyer with nothing down walks away easily.
• Consider an earn-out or holdback for group/PE deals. Bulletproof hosts have dissected these on air — the “hold back or earn-out money” that’s contingent on doctor retention or performance. It ties part of your payout to the transition actually working.

Seller financing vs. selling to a DSO: what’s really being sold?

Here’s where Craig Spodak’s voice matters, because this isn’t only a spreadsheet decision. When you carry a note for an individual buyer — a real dentist who’s going to own and love the practice you built — you’re not just moving money. You’re handing your patients, your team, and your legacy to a human being you chose.

Contrast that with the DSO exit. On the show, Pete described the gut-check of sitting across from private-equity suitors many times: “There’s a lot of realizations when someone’s willing to give you a check to walk away… you have to pause for a second and think — who’s the dummy here? Is it me or is it them? Who’s getting the better end of this?” A big check with a rollover-equity “promissory note” attached can look like freedom and turn out to be a leash.

Seller financing to an independent buyer is the anti-DSO play. It keeps the practice private. It keeps the culture intact. And it lets you exit on your terms — clinical excellence as the floor, and a life above it as the goal.

When should you NOT finance the deal?

Be honest with yourself:

• You need every dollar at close to fund your own next chapter — then don’t tie up capital in a note.
• The buyer can’t demonstrate operating competence — a note only pays if they run the practice well.
• You’re not willing to step back in if it goes sideways — enforcement is real work.
• A clean bank deal already closes at your number — don’t take on risk you don’t need.

The point isn’t that seller financing is always right. It’s that the sellers who never even consider it leave money — and good deals — on the table by default.

The bottom line

Seller financing is how sophisticated dentists close deals banks can’t, command higher prices, generate interest income, and hand their legacy to a buyer they actually chose. Structure it like a lender, protect the note, and reverse-engineer the cash. Done right, holding paper turns a fragile all-cash deal into a stronger, richer, more human transition.

This is exactly the kind of deal math the Bulletproof community pressure-tests in the open — no gurus, no gatekeeping, just owners who’ve actually done it. Start with the best dental podcast for practice owners, where Pete and Craig break down real transitions episode after episode. When you’re ready to sit in the room with dentists structuring these exits right now, come to the Bulletproof Summit or apply to the Bulletproof Mastermind — the tribe of owners who refuse to do this alone.

Dentistry is too lonely a profession to make the biggest financial decision of your life by yourself. You don’t have to.

The 1% of dentists, who want 100% from life.