Sprintlaw offers smart, simple and affordable legal solutions for small businesses and startups.
Vendor Finance Agreements, quick & stress-free.
Sprintlaw offers smart, simple and affordable legal solutions for small businesses and startups.
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Why do I need a Vendor Finance Agreement?
An important agreement between vendor and purchaser, a Vendor Finance Agreement covers key terms like the repayment schedule, interest amounts and what will happen if the borrower defaults on the repayments.
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A Vendor Finance Agreement is a contract between the vendor (the seller) and the purchaser, where the vendor agrees to lend all or part of the purchase price to the buyer. This type of agreement is typically used when the buyer doesn’t have the full funds to complete the business purchase upfront.
In a Vendor Finance Agreement, the buyer agrees to repay the vendor over time, often with interest, under the terms outlined in the contract. This arrangement can make it easier for buyers to acquire a business without needing to secure external financing. However, it’s important for both parties to understand the risks and obligations involved, which is why having a tailored, legally sound agreement is essential.
A Vendor Finance Agreement is typically used when a purchaser doesn’t have the full funds available to buy a business outright. In this scenario, the seller (or vendor) agrees to lend all or part of the purchase price to the buyer. This type of arrangement allows the buyer to proceed with the purchase without needing to secure external financing immediately.
Under a Vendor Finance Agreement, the buyer repays the vendor over an agreed period, usually with interest. This arrangement can be beneficial for both parties—the buyer can acquire the business with more flexible payment terms, while the vendor can sell the business without waiting for the buyer to obtain full funding.
It’s important to note that these agreements should be carefully structured to ensure both parties understand the repayment terms, interest rates, and any other conditions that apply to the loan. Having a well-drafted Vendor Finance Agreement is crucial to protect both the buyer and seller in the transaction.
A Vendor Finance Agreement should clearly detail the specifics of the loan arrangement between the buyer and seller. Some of the key terms that should be included are:
Including these terms in your Vendor Finance Agreement helps ensure that both parties have a clear understanding of their rights and obligations. Having a lawyer draft and review the agreement will help avoid potential disputes and discrepancies in the future, protecting both the buyer and seller in the transaction.
Offering vendor finance comes with certain risks, so it’s crucial to take steps to protect yourself. Properly documenting the transaction is the most effective way to minimise risk, and this is where having a lawyer is essential. A well-drafted Vendor Finance Agreement ensures that both parties’ rights and obligations are clearly defined, reducing the chance of future disputes.
Here are some key steps to protect yourself:
By working closely with a lawyer to draft and review the Vendor Finance Agreement, you can ensure that your business is protected and the transaction is as risk-free as possible.
Our fixed-fee Vendor Finance Agreement packages start at $1500 + GST. This includes a Vendor Finance Agreement drafted to meet your specific requirements, phone consultations with a Sprintlaw lawyer and a complimentary amendment to the final draft we provide to you.
why sprintlaw
We’re an award-winning, totally online law firm. Forget the hassle of meeting a lawyer face-to-face. Our top-trained lawyers are ready to help wherever you are in Australia.
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our team
Our lawyers were recruited from Australia's top firms and use our custom-built technology to provide a better and more affordable legal service.
how it works
1 / Get a free quote
Our legally trained consultants will prepare a fixed-fee quote for you.
2 / Accept online
Accept your fixed-fee quote and e-sign our engagement letter.
3 / Speak with a lawyer
Our expert lawyers will talk you through your project via phone, video call or whatever suits!
That's it!
Receive your completed project, usually within 5 - 10 working days.
Adapt Leadership
“Can't speak highly enough of my experience with Sprintlaw - quality advice, fast and efficient responsiveness and a professional product.”
Kiindred
“I had a fantastic experience with Sprintlaw - it was easy, cost-effective and their lawyers provided very high quality advice. I could tell they really cared about my business.”
Soul Burger
“They’ve helped us tremendously and are seriously knowledgeable and honest. Couldn’t recommend the crew at Sprintlaw more!”