If you’re about to sell or buy a business, that’s great!

However, entering into a business transaction can be a big expense.

In some situations, the vendor might agree to lend all or part of the purchase price to the purchaser.

To put this agreement into writing, you need a Vendor Finance Agreement.

What Is A Vendor Finance Agreement?

This contract is essentially an agreement between a vendor and a purchaser, where the vendor agrees to lend all or part of the purchase price to the buyer.

It’s typically used when the buyer does not have the full funds available to complete the business purchase.

In this case, the vendor might agree to loan all or part of the purchase price to the buyer for a set period, and with an agreed interest rate.

What Is Included In A Vendor Finance Agreement?

The most common terms we’ve seen in a Vendor Finance Agreement include:

  • Payment schedule
  • Interest rate
  • Consequences of default
  • Rights on liquidation of the business
  • Liability protection

However, each transaction is different! As such, it’s important to speak to a lawyer to understand exactly how to protect yourself and have a contract tailored to your situation.

Need Help?

If you need help putting together a Vendor Finance Agreement, we’re here to help!

You can reach us on 1800 730 617 or at team@sprintlaw.com.au for a free, no-obligations chat about your situation.

About Sprintlaw

Sprintlaw's expert lawyers make legal services affordable and accessible for business owners. We're Australia's fastest growing law firm and operate entirely online.

(based on Google Reviews)
Do you need legal help?
Get in touch now!

We'll get back to you within 1 business day.

  • This field is for validation purposes and should be left unchanged.

Related Articles
What Documents Are Required For A Company?
How To Initial A Document