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Seller Financing Business Contract for Singapore

Seller Financing Business Contract Template for Singapore

A Seller Financing Business Contract under Singapore law is a comprehensive legal agreement where the seller provides financing to the buyer for the purchase of a business. This document, governed by Singapore's Contract Law and related statutes, outlines the terms of sale, payment structure, security arrangements, and financing conditions. It includes provisions for interest rates, repayment schedules, default remedies, and business transfer terms, all compliant with Singapore's regulatory framework and financial regulations.

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What is a Seller Financing Business Contract?

The Seller Financing Business Contract is essential when traditional financing options are not suitable or available for business acquisitions in Singapore. This document structures the sale where the seller acts as the lender, typically requiring a down payment and regular installments with interest. It must comply with Singapore's financial regulations, including the Moneylenders Act and Securities and Futures Act. The contract addresses risk management, security interests, and default provisions while ensuring smooth business transition.

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

1. Parties: Identifies and defines all parties to the contract including legal status and addresses

2. Background/Recitals: States the context and purpose of the agreement, including details of the business being sold

3. Definitions: Defines key terms used throughout the agreement

4. Purchase Price and Payment Terms: Details the total purchase price, down payment, and financing structure

5. Interest Rate and Repayment Schedule: Specifies interest rate, payment dates, and amortization schedule

6. Security and Collateral: Details assets or guarantees securing the financed amount

7. Default Provisions: Defines events of default and consequences

8. Representations and Warranties: Legal assurances from both parties

9. Governing Law: Specifies Singapore law as governing law

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

1. Insurance Requirements: Required insurance coverage for business assets - used when significant physical assets are involved

2. Non-Compete Provisions: Restrictions on seller's future business activities - used when protecting goodwill is crucial

3. Training and Transition: Terms for business handover and training - used when specialized knowledge transfer is needed

4. Third-Party Consents: Requirements for obtaining third-party approvals - used when contracts/licenses require consent for transfer

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

1. Payment Schedule: Detailed amortization table showing payment dates and amounts

2. Asset Schedule: Itemized list of business assets included in sale

3. Security Documents: Forms of security documents, personal guarantees

4. Due Diligence Report: Summary of business evaluation and verification

5. Financial Statements: Recent business financial statements and projections

6. Contracts Schedule: List of existing contracts being transferred

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

Singapore

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use

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