My wife and I are in the process of selling our business to a buyer. We have agreed on an amount to sell the business for, and to owner-finance the balance.
The buyer has already taken over day-to-day responsibilities as we have moved to out of state. The buyer is currently paying a rental fee until we have a contract formalized. The buyer has investors and believes he will be able to pay us off in full before the loan term ends, but that is not for certain.
What is an acceptable way to determine an interest rate and should it be structured in some way off of prime?
We have some credit card debt we were going to pay off with the money from the sale. I would like to structure the loan in a way to encourage the buyer to pay us off as soon as possible. Is there a common way to structure these agreements to facilitate such?