Business Seller Financing Agreement Template for Germany

A Business Seller Financing Agreement becomes necessary when a business owner wishes to facilitate the sale of their business by providing direct financing to the buyer, typically when traditional bank financing is not available or desirable. This document, governed by German law, establishes the legal framework for the financing arrangement, including the loan amount, interest rates, repayment terms, and security provisions. It must comply with German banking regulations and commercial laws while protecting both parties' interests. The agreement includes crucial elements such as collateral arrangements, default provisions, monitoring rights, and reporting requirements. It's particularly relevant in situations where the seller has confidence in the business's future performance and the buyer's ability to manage it successfully.

1. Parties: Identification of the seller-financier and the buyer-borrower, including full legal names, registration details, and addresses

2. Background: Context of the business sale transaction and the parties' intention to enter into a seller financing arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, security-related concepts, and specific German law terminology

4. Purchase Price and Financing Terms: Details of the total purchase price, down payment, financed amount, interest rate, and payment schedule

5. Security and Collateral: Description of assets serving as collateral and security arrangements

6. Conditions Precedent: Prerequisites that must be satisfied before the financing becomes effective

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Covenants: Ongoing obligations of the buyer, including financial covenants and business operation requirements

9. Events of Default: Circumstances constituting default and corresponding remedies

10. Monitoring and Reporting: Requirements for financial reporting and business performance monitoring

11. Assignment and Transfer: Provisions regarding the transfer of rights and obligations under the agreement

12. Governing Law and Jurisdiction: Specification of German law application and jurisdiction for disputes

13. Notices: Communication requirements and contact details for official notices

14. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments