Seller Financing Business Contract Template for Germany

The Seller Financing Business Contract is a specialized agreement used when a business owner wishes to sell their enterprise while also acting as the financier for the transaction. This arrangement is particularly common in situations where traditional bank financing may be difficult to obtain, or when the seller wishes to earn interest income while facilitating the sale. The document, governed by German law, must comply with both the German Civil Code (BGB) and Commercial Code (HGB), particularly regarding security interests and payment terms. It typically includes detailed provisions about the business being sold, purchase price, financing terms, security arrangements, warranties, and ongoing obligations. The agreement is especially useful for small to medium-sized business transactions where the seller has confidence in the business's future performance and the buyer's ability to manage it successfully.

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

2. Background: Context of the transaction, including brief description of the business being sold and rationale for seller financing

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms and business-specific terminology

4. Sale and Purchase: Core terms of the business sale, including what is being sold and the total purchase price

5. Financing Terms: Details of the seller financing arrangement, including principal amount, interest rate, payment schedule, and term

6. Security and Collateral: Description of assets or guarantees securing the financing portion

7. Conditions Precedent: Prerequisites that must be satisfied before completion of the sale and initiation of financing

8. Completion Mechanics: Process and requirements for closing the transaction

9. Seller's Warranties: Warranties regarding the business, assets, and seller's capacity to enter into the agreement

10. Buyer's Warranties: Warranties regarding buyer's capacity and ability to meet payment obligations

11. Default and Remedies: Consequences of payment default and other breaches, including enforcement rights

12. Covenants: Ongoing obligations of both parties during the financing period

13. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction for disputes

14. Notices: Process and requirements for formal communications between parties

15. Execution: Signature blocks and execution requirements