Vendor Loan/ Vendor Financing

An agree­ment made prima­rily in connec­tion with the purchase of shares in a company (some­ti­mes also of shares in a package), wher­eby the seller provi­des all or part of the purchase price as a loan to the buyer (vendor loan; also often used in German). Often prac­ti­ced in connec­tion with seed capi­tal; the foun­der brings the shares of the bank or other inves­tors into his company in this way (as share capital).