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Vendor Finance Contract Template for Switzerland

A comprehensive financing agreement governed by Swiss law that enables vendors to provide direct financing to purchasers for equipment, assets, or services. The document establishes the terms and conditions of the financing arrangement, including credit facility details, security interests, repayment terms, and related obligations. It incorporates specific provisions required under Swiss contract law and financial regulations, while addressing key aspects such as interest calculations, default scenarios, and enforcement mechanisms in accordance with Swiss judicial requirements.

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What is a Vendor Finance Contract?

The Vendor Finance Contract is a specialized financing agreement used when a vendor wishes to provide direct financing to purchasers for acquiring equipment, assets, or services. This document is particularly crucial in Switzerland, where it must comply with the Swiss Code of Obligations and relevant financial regulations. The contract typically includes detailed provisions for credit facilities, security arrangements, interest calculations, and enforcement mechanisms. It's commonly used in large-scale equipment purchases or when traditional banking finance may not be the optimal solution. The document incorporates Swiss-specific legal requirements while maintaining commercial flexibility, making it suitable for both domestic and international transactions involving Swiss entities.

What sections should be included in a Vendor Finance Contract?

1. Parties: Identification of the vendor/finance provider and the purchaser/borrower

2. Background: Context of the transaction, relationship between parties, and purpose of the financing

3. Definitions: Defined terms used throughout the agreement

4. Facility Amount and Purpose: Details of the credit facility amount and its intended use

5. Drawdown Conditions: Prerequisites and conditions for accessing the financing

6. Interest and Fees: Interest rates, calculation methods, and applicable fees

7. Repayment Terms: Schedule and methods of repayment, including early repayment provisions

8. Security and Collateral: Description of security interests and collateral arrangements

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

10. Covenants: Ongoing obligations and restrictions on the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Indemnification: Mutual indemnification obligations and procedures

13. Notices: Communication procedures and contact details

14. Governing Law and Jurisdiction: Specification of Swiss law application and jurisdiction

15. Miscellaneous: Standard boilerplate provisions including amendments, assignments, and severability

What sections are optional to include in a Vendor Finance Contract?

1. Syndication Provisions: Required when multiple lenders are involved or syndication is contemplated

2. Regulatory Compliance: Specific section needed when transaction falls under particular regulatory frameworks

3. Tax Provisions: Detailed tax section when complex tax implications exist

4. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is crucial

5. Step-In Rights: Required when lender needs right to take control in specific circumstances

6. Intercreditor Provisions: Needed when multiple creditors are involved with different priorities

7. Currency Provisions: Required for cross-border transactions with multiple currencies

8. Force Majeure: Detailed force majeure provisions when specific risks need to be addressed

What schedules should be included in a Vendor Finance Contract?

1. Schedule 1 - Facility Details: Detailed terms of the facility including limits, interest rates, and fees

2. Schedule 2 - Drawdown Notice: Form of drawdown request and required documentation

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule and payment dates

4. Schedule 4 - Security Documents: List and copies of all security documents

5. Schedule 5 - Conditions Precedent: List of required documents and conditions for initial drawdown

6. Appendix A - Financial Covenants: Detailed financial ratios and calculations

7. Appendix B - Compliance Certificate: Form of periodic compliance certification

8. Appendix C - Equipment List: Detailed list of financed equipment or assets if applicable

9. Appendix D - Insurance Requirements: Specific insurance requirements and minimum coverage

Authors

Alex Denne

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

Jurisdiction

Switzerland

Publisher

Ƶ

Document Type

Vendor Agreement

Cost

Free to use

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