Posted by Elizabeth Gore-Jones
on 14 February 2024
We have found that it is becoming more common for a purchaser of a business to require vendor finance.
There are obviously risks associated with lending money on the purchase of a business, but certain steps can be taken to help protect the position of the vendor/lender:
1. registration as Purchase Money Security Interest on the PPSR;
2. personal guarantees;
3. registration of security interest over all of the assets of the borrower.
It is important to get all of these documents correctly prepared and registered.
If the borrower does default, then the lender should have the right to take certain actions including:
1. appointment of receiver to sell the assets of the borrower to recover the debt
2. proceedings against the guarantors if payment is not made which may result in bankruptcy.
If your business needs legal guidance on this matter, we are here to assist.
Contact us now and safeguard your interests.
