Vendor Finance Agreement Document

Vendor finance agreement is a legal paper which is prepared when two parties deal with each other regarding the finance of a commodity or good. It is considered as a kind of loan which is generally needed when the purchasing party fall short of the money and the vendor provide them with finance under some terms and conditions. This helps the vendor to increase the volume of their sale as well as earn interest. But this practice should be carried out very carefully as it increasing the risk profile of the vendor company.

Sample Vendor Finance Agreement Document

Name of the Borrower: Moral Partners

Name of the Vendor: Better Developers

Loan Period: 5 years

Rate of Interest: 1% per annum

Date of approval: 12June, 2012

Terms and conditions of the agreement

  • The borrower, henceforth known as the Purchaser, is indebted to the vendor, henceforth known as the finance vendor in the principal sum of 80% of the finances with rate of interest of 1% p.a. payable in promissory note.
  • The finance will be given in the form of monthly installment of $60,000 each.
  • The location of the land to be purchased can be of the purchaser’s choice.
  • All the construction maps of the houses will be approved by the purchaser but should be shown to the finance vendor before the plan is finalized.
  • Any fault in the repayment of loan will result in the forfeiture of the property by the finance vendor.
  • Any late payments from the Vendor to the Purchaser will immediately lead to the termination of the contract.
  • Both the parties have an equal right to call off the agreement.
  • Any party willing to terminate the agreement shall give a written notice a month before.

Signature of the Parties:

Signature of the Borrower:

Signature of the Vendor:


Posted in Financial Documents