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Business Seller Financing Agreement for Australia

Business Seller Financing Agreement Template for Australia

An Australian-jurisdiction agreement that facilitates the sale of a business where the seller provides financing to the buyer for a portion of the purchase price. The agreement details the terms of the financing arrangement, including payment schedules, interest rates, security arrangements, and ongoing obligations of both parties. It incorporates specific provisions compliant with Australian business and credit laws, including the Personal Property Securities Act 2009 (Cth) and relevant state-specific business sale regulations. The document includes comprehensive security provisions and operating covenants to protect the seller's interests during the financing period.

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What is a Business Seller Financing Agreement?

The Business Seller Financing Agreement is utilized in Australian business sales where traditional financing options may not be suitable or available, and the seller agrees to finance part of the purchase price. This arrangement is particularly common in small to medium-sized business transfers where buyers may face challenges securing traditional bank financing. The document comprehensively addresses the unique aspects of vendor financing under Australian law, including compliance with the Personal Property Securities Act 2009 (Cth) and state-specific business sale regulations. It typically includes detailed provisions for payment terms, security arrangements, buyer's operating covenants, and seller's remedies in case of default. The agreement balances the seller's need for security with the buyer's ability to operate and grow the business effectively.

What sections should be included in a Business Seller Financing Agreement?

1. Parties: Identifies and defines the Seller, Buyer, and any guarantors involved in the transaction

2. Background: Outlines the context of the sale and financing arrangement, including brief description of the business being sold

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Sale and Purchase: Details the assets/shares being sold and the agreed purchase price

5. Financing Terms: Specifies the amount being financed, interest rate, payment schedule, and term of the loan

6. Security Arrangements: Describes the security being provided for the financing, including charges over assets or personal guarantees

7. Conditions Precedent: Lists conditions that must be satisfied before the agreement becomes effective

8. Representations and Warranties: States the promises and assurances made by both parties

9. Buyer's Covenants: Details the ongoing obligations of the buyer, including business operation requirements and financial reporting

10. Default and Enforcement: Specifies what constitutes default and the seller's enforcement rights

11. General Provisions: Includes standard clauses such as notices, amendments, governing law, and dispute resolution

What sections are optional to include in a Business Seller Financing Agreement?

1. Key Performance Requirements: Used when the financing terms are linked to business performance metrics or earnout provisions

2. Environmental Compliance: Required for businesses with significant environmental impact or compliance requirements

3. Intellectual Property Protection: Included when the business sale involves significant IP assets

4. Employee Matters: Necessary when specific employee retention or transition arrangements are part of the sale

5. Non-Competition Provisions: Added when restrictions on the seller's future business activities are required

6. Third-Party Consents: Included when the sale requires specific third-party approvals or notifications

7. Tax Matters: Required when specific tax arrangements or allocations need to be addressed

8. Transition Services: Used when the seller will provide post-sale support or services

What schedules should be included in a Business Seller Financing Agreement?

1. Schedule 1 - Business Assets: Detailed inventory of all assets included in the sale

2. Schedule 2 - Payment Schedule: Detailed amortization schedule showing payment dates, amounts, and interest calculations

3. Schedule 3 - Security Details: Comprehensive description of all security arrangements and collateral

4. Schedule 4 - Excluded Assets: List of assets specifically excluded from the sale and security arrangements

5. Schedule 5 - Key Contracts: List of important business contracts being transferred

6. Schedule 6 - Intellectual Property: Detailed list of IP assets included in the sale

7. Appendix A - Financial Statements: Recent financial statements of the business

8. Appendix B - Due Diligence Documents: Key due diligence documents and certificates

9. Appendix C - Form of Security Documents: Templates of required security documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions


















































Clauses












































Relevant Industries

Retail

Manufacturing

Professional Services

Hospitality

Construction

Technology

Healthcare

Transport and Logistics

Agriculture

Real Estate

Education and Training

Automotive

Relevant Teams

Legal

Finance

Corporate Development

Risk and Compliance

Business Advisory

Mergers & Acquisitions

Commercial Operations

Credit Management

Strategy

Relevant Roles

Business Owner

CEO

Managing Director

Chief Financial Officer

Commercial Lawyer

Business Broker

Finance Director

Corporate Counsel

Business Development Manager

Risk Manager

Compliance Officer

Financial Controller

Investment Manager

Business Advisory Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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