# SFSB-1: Standard Seller Finance Purchase Agreement **Seller Finance Standards Board | Published: 2026 | Version 1.0** --- ## Purpose This document establishes the Seller Finance Standards Board's standard form agreement for the purchase and sale of seller-financed promissory notes secured by business assets, real property, or both. It is designed to provide a uniform baseline for note transactions in the small-business seller finance market, reducing ambiguity, protecting all parties, and facilitating efficient closings. ## Scope This form applies to arm's-length purchases and sales of commercial seller-financed notes where the borrower is a business entity or individual acting in a commercial capacity. It is not intended for consumer mortgage transactions subject to federal consumer-protection statutes (TILA, RESPA, SAFE Act). Parties are encouraged to have qualified legal counsel review and adapt this form for jurisdiction-specific requirements. --- ## STANDARD NOTE PURCHASE AND SALE AGREEMENT **THIS NOTE PURCHASE AND SALE AGREEMENT** (this "Agreement") is entered into as of [DATE] (the "Effective Date") by and between: **SELLER:** [SELLER LEGAL NAME], a [STATE] [entity type / individual], with its principal address at [SELLER ADDRESS] ("Seller"); and **BUYER:** [BUYER LEGAL NAME], a [STATE] [entity type / individual], with its principal address at [BUYER ADDRESS] ("Buyer"). Seller and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties." --- ### RECITALS WHEREAS, Seller is the holder and owner of that certain promissory note described in Exhibit A attached hereto and incorporated herein by reference (the "Note"), which Note is secured by collateral described in Exhibit A; WHEREAS, Seller desires to sell, transfer, and assign the Note and all related security interests and collateral documents to Buyer, and Buyer desires to purchase and acquire the same, upon the terms and conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: --- ### ARTICLE I — DEFINITIONS As used in this Agreement, the following terms shall have the meanings ascribed to them below: **1.1 "Note"** means the promissory note described in Exhibit A, together with all allonges, endorsements, and amendments thereto. **1.2 "Face Amount"** means the total remaining scheduled payments due under the Note as of the Effective Date, as set forth in Exhibit A and the Payment History attached as Exhibit B. For partial purchases, Face Amount means the sum of the installment payments being acquired by Buyer. **1.3 "Purchase Price"** means the amount payable by Buyer to Seller for the Note, as set forth in Section 3.1. **1.4 "Closing"** means the consummation of the purchase and sale of the Note pursuant to this Agreement. **1.5 "Closing Date"** means [DATE], or such other date as the Parties may agree in writing. **1.6 "Originator"** means the original seller of the underlying business or property who created and delivered the Note to the original payee. **1.7 "Servicer"** means the entity currently responsible for collecting payments, maintaining payment records, and managing borrower communications with respect to the Note, identified in Exhibit A. If no third-party servicer is designated, Seller is the current servicer. **1.8 "Collateral Documents"** means all deeds of trust, mortgages, UCC financing statements, security agreements, guaranties, and other instruments securing repayment of the Note, as described in Exhibit A. **1.9 "Due Diligence Period"** has the meaning set forth in Section 5.1. **1.10 "Payment History"** means the complete record of all scheduled payments, amounts received, dates received, and any outstanding balances, as set forth in Exhibit B. **1.11 "Unpaid Principal Balance" or "UPB"** means the outstanding principal balance of the Note as of the Effective Date, as shown on the Payment History. **1.12 "Borrower"** means [BORROWER/PAYOR NAME], the maker of the Note. **1.13 "Personal Guaranty"** means any personal guaranty of the Note executed by an individual guarantor, if applicable, as identified in Exhibit A. --- ### ARTICLE II — PURCHASE AND SALE **2.1 Agreement to Purchase and Sell.** Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell, assign, transfer, and convey to Buyer, and Buyer hereby agrees to purchase and accept from Seller, all of Seller's right, title, and interest in and to: (a) the Note; (b) all Collateral Documents; (c) the Personal Guaranty, if any; (d) all accrued and unpaid interest as of the Closing Date; and (e) all related files, records, and servicing materials identified in the Closing Checklist attached as Exhibit C. **2.2 No Retained Interest.** Upon Closing, Seller shall retain no economic or legal interest in the Note or the Collateral Documents except as expressly provided in this Agreement. **2.3 Partial Purchase.** If this transaction constitutes a partial purchase of the Note (i.e., Buyer is purchasing fewer than all remaining scheduled payments), the specific payments being purchased are identified in Exhibit A, and Seller shall retain the rights to all remaining payments not identified therein. The Parties shall cooperate to document the partial assignment in a manner consistent with applicable law and servicer requirements. --- ### ARTICLE III — PURCHASE PRICE AND PAYMENT **3.1 Purchase Price.** The Purchase Price for the Note shall be [PURCHASE PRICE] ($[AMOUNT]), representing [PCT]% of the Face Amount of $[FACE AMOUNT]. **3.2 Payment of Purchase Price.** The Purchase Price shall be payable by Buyer to Seller in immediately available funds (wire transfer or ACH) at Closing. Buyer shall deliver funds to the following account: [WIRE INSTRUCTIONS / ESCROW INSTRUCTIONS]. **3.3 Escrow.** [OPTIONAL: The Parties may elect to use an escrow agent. If so, insert escrow terms here.] Unless the Parties agree otherwise in writing, no escrow shall be required, and the Purchase Price shall be wired directly to Seller at Closing. **3.4 Adjustments.** The Purchase Price shall be adjusted at Closing for: (a) any payments received by Seller after the Effective Date and prior to Closing, which shall reduce the Purchase Price on a dollar-for-dollar basis; and (b) any payments due but not received prior to Closing that create a delinquency, which shall be addressed pursuant to Section 5.2. --- ### ARTICLE IV — REPRESENTATIONS AND WARRANTIES **4.1 Representations and Warranties of Seller.** Seller represents and warrants to Buyer, as of the Effective Date and as of the Closing Date, as follows: (a) **Authority.** Seller has full legal authority to enter into this Agreement and to sell the Note. This Agreement constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms. (b) **Good Title.** Seller is the sole legal and beneficial owner of the Note and has good, marketable, and unencumbered title to the Note, free and clear of all liens, claims, encumbrances, and adverse interests. The Note has not been previously sold, assigned, pledged, or hypothecated to any other person or entity. (c) **No Prior Assignment.** Seller has not entered into any agreement to sell or assign the Note to any third party, and no such agreement is pending. (d) **Authenticity of Documents.** The Note and all Collateral Documents delivered to Buyer are true, correct, and complete originals (or certified copies where originals are unavailable), and have not been altered, modified, or amended except as disclosed in writing to Buyer prior to Closing. (e) **Payment History Accurate.** The Payment History attached as Exhibit B is true, accurate, and complete in all material respects. All payments reflected therein as received have been actually received. Seller has not waived, deferred, or modified any payment obligation of Borrower except as disclosed in writing. (f) **No Undisclosed Modifications.** The Note has not been modified, extended, amended, or restated except as set forth in writing and delivered to Buyer prior to Closing. No oral modifications have been agreed to with Borrower. (g) **No Known Defaults.** As of the Effective Date, Seller has no knowledge of any default under the Note or any Collateral Document that has not been disclosed in writing to Buyer, including but not limited to any monetary default, covenant breach, or event of default as defined in the Note. (h) **No Pending Litigation.** There is no pending or, to Seller's knowledge, threatened action, suit, proceeding, or claim relating to the Note, the Collateral Documents, or the underlying collateral that has not been disclosed in writing to Buyer. (i) **No Pending Bankruptcy.** To Seller's knowledge, Borrower has not filed, and no party has filed against Borrower, a petition in bankruptcy, insolvency, receivership, or similar proceeding. (j) **Compliance with Law.** The Note was originated in compliance with all applicable federal and state laws, including applicable usury laws, in effect at the time of origination. (k) **No Undisclosed Encumbrances on Collateral.** To Seller's knowledge, there are no liens, encumbrances, or claims against the collateral securing the Note other than those disclosed in writing to Buyer prior to Closing. **4.2 Representations and Warranties of Buyer.** Buyer represents and warrants to Seller, as of the Effective Date and as of the Closing Date, as follows: (a) **Authority.** Buyer has full legal authority to enter into this Agreement and to purchase the Note. (b) **Sophisticated Investor.** Buyer is a sophisticated investor with knowledge and experience in financial and business matters, including the purchase of seller-financed notes, and is capable of evaluating the risks and merits of the transaction described herein. (c) **Own Account.** Buyer is purchasing the Note for its own account and not with a view to resale or distribution in violation of applicable securities laws. (d) **Independent Investigation.** Buyer has conducted, or will conduct during the Due Diligence Period, its own independent investigation of the Note and the collateral and is not relying solely on Seller's representations in making its investment decision. --- ### ARTICLE V — DUE DILIGENCE **5.1 Due Diligence Period.** Buyer shall have [NUMBER] business days from the Effective Date (the "Due Diligence Period") to review and approve all documents and information relating to the Note, including the documents listed in Exhibit C. Buyer may terminate this Agreement without penalty by written notice to Seller prior to the expiration of the Due Diligence Period if Buyer, in its sole and absolute discretion, is not satisfied with its due diligence findings. **5.2 Document Delivery.** Within [3] business days of the Effective Date, Seller shall deliver to Buyer (or make available for review) all documents listed in Exhibit C, including the original Note (or certified copy), all Collateral Documents, the Payment History, and all borrower correspondence. **5.3 Waiver of Due Diligence.** If Buyer does not terminate this Agreement prior to the expiration of the Due Diligence Period, Buyer shall be deemed to have approved all due diligence materials and waived its right to terminate pursuant to Section 5.1. --- ### ARTICLE VI — CLOSING CONDITIONS AND PROCESS **6.1 Conditions to Buyer's Obligation.** Buyer's obligation to close is conditioned upon: (a) all representations and warranties of Seller being true and correct in all material respects as of the Closing Date; (b) Seller's delivery of all documents listed in the Closing Checklist (Exhibit C); (c) no material adverse change in the Note, the collateral, or the Borrower's payment status occurring after the Effective Date; and (d) Buyer's satisfactory completion of its due diligence. **6.2 Conditions to Seller's Obligation.** Seller's obligation to close is conditioned upon Buyer's delivery of the Purchase Price in immediately available funds on the Closing Date. **6.3 Documents to Be Delivered at Closing.** At or before Closing, Seller shall deliver to Buyer: (a) the original promissory Note with an endorsement or allonge executed by Seller, making the Note payable to Buyer (or to Buyer's order); (b) an executed Assignment of Note and Collateral Documents in recordable form; (c) originals or certified copies of all Collateral Documents; (d) the original Payment History ledger or certified copy thereof; (e) copies of all borrower correspondence; (f) any insurance certificates or policies held by Seller; (g) an executed Seller's Affidavit of Title; and (h) any other documents listed in Exhibit C. --- ### ARTICLE VII — SERVICING TRANSFER **7.1 Transfer of Servicing.** If the Note is currently serviced by a third-party Servicer, Seller shall use commercially reasonable efforts to effectuate a transfer of servicing to Buyer's designated servicer within [30] days following Closing. Seller shall cooperate with Buyer to notify Borrower of the change in payee and servicing contact within [10] business days of Closing, as required by applicable law. **7.2 Interim Payments.** Any payments received by Seller after Closing shall be promptly remitted to Buyer, net of any servicing fees earned prior to the Closing Date. --- ### ARTICLE VIII — INDEMNIFICATION **8.1 Seller's Indemnification.** Seller shall indemnify, defend, and hold harmless Buyer from and against any and all losses, damages, claims, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to: (a) any breach of Seller's representations, warranties, or covenants under this Agreement; (b) any act or omission of Seller relating to the Note occurring prior to the Closing Date; or (c) any undisclosed prior assignment, lien, or encumbrance on the Note. **8.2 Buyer's Indemnification.** Buyer shall indemnify, defend, and hold harmless Seller from and against any losses arising out of Buyer's breach of its representations, warranties, or covenants under this Agreement. **8.3 Survival.** All representations, warranties, and indemnification obligations shall survive the Closing for a period of [2] years, except that representations relating to title and prior assignments shall survive indefinitely. --- ### ARTICLE IX — DISPUTE RESOLUTION **9.1 Arbitration.** Any dispute, claim, or controversy arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be finally resolved by binding arbitration administered by [JAMS / AAA] in accordance with its Commercial Arbitration Rules then in effect. The arbitration shall be conducted in [CITY, STATE]. The award of the arbitrator shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. **9.2 Governing Law.** This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to its conflict of laws provisions. --- ### ARTICLE X — GENERAL PROVISIONS **10.1 Entire Agreement.** This Agreement, together with all Exhibits attached hereto, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, and understandings of the Parties. **10.2 Amendments.** This Agreement may not be amended except by a written instrument signed by both Parties. **10.3 Counterparts; Electronic Signatures.** This Agreement may be executed in counterparts, each of which shall constitute an original. Electronic signatures shall be deemed valid and binding to the same extent as original signatures. **10.4 Severability.** If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. **10.5 Notices.** All notices shall be in writing and delivered by email with confirmation of receipt, overnight courier, or certified mail to the addresses set forth on the signature page. **10.6 Assignment.** Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party. --- ### SIGNATURE PAGE IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. **SELLER:** Signature: ________________________________ Name: [SELLER NAME] Title: [TITLE, IF ENTITY] Date: ____________________ Email: ____________________ **BUYER:** Signature: ________________________________ Name: [BUYER NAME] Title: [TITLE, IF ENTITY] Date: ____________________ Email: ____________________ --- ### EXHIBIT LIST **Exhibit A** — Note Description (Note date, original principal, current UPB, interest rate, payment amount, maturity date, balloon amount if any, collateral description, lien position, current servicer) **Exhibit B** — Payment History (complete ledger of all scheduled and actual payments from origination through Effective Date) **Exhibit C** — Closing Checklist (itemized list of all documents to be delivered at or before Closing, with Received / Pending status) --- *This document is published by the Seller Finance Standards Board (SFSB) as a best practice guideline. It does not constitute legal advice. Members and users should consult qualified legal counsel for jurisdiction-specific requirements.* *© 2026 Seller Finance Standards Board. All rights reserved. Members may reproduce for internal use with attribution.*