Vendor Loan

What is a vendor loan?

An interest-bearing loan from the seller to the buyer as a building block for acquisition financing. Usually without or only with secondary collateral. Co-financing banks (and also buyers) often push for this, on the one hand to see whether the seller really believes in the good continuation of his company and thus gives a strong commitment, and on the other hand to reduce their own exposure. Common terms are between 1 and 3 years, sometimes 5 years.

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