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Business Seller Financing Agreement for Indonesia

Business Seller Financing Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that facilitates the sale of a business where the seller provides financing to the buyer for a portion of the purchase price. The agreement details the terms of financing, including payment schedule, interest rates, security arrangements, and conditions that comply with Indonesian civil code and financial regulations. It incorporates specific provisions required under Indonesian law for secured lending, including fiduciary security arrangements and mandatory Indonesian language requirements for contracts. The document includes provisions for collateral, default remedies, and business operation requirements during the financing period.

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What is a Business Seller Financing Agreement?

The Business Seller Financing Agreement is utilized in situations where traditional financing options may be limited or when the seller wishes to generate ongoing income through interest payments while facilitating the sale of their business. This document, governed by Indonesian law and regulations, structures the financing arrangement between the seller and buyer, ensuring compliance with the Indonesian Civil Code (KUHPerdata) and relevant financial services regulations. It's particularly relevant in the Indonesian market where access to traditional bank financing may be limited for business acquisitions. The agreement covers crucial elements including purchase price, down payment, interest rates, repayment terms, security arrangements, and operating covenants. It must be drafted in compliance with OJK (Financial Services Authority) regulations and typically requires proper registration of security interests under Indonesian law.

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

1. Parties: Identification of the Seller/Financier and the Buyer/Borrower, including complete legal names, registration numbers, and addresses

2. Background: Context of the business sale and financing arrangement, including brief description of the business being sold

3. Definitions: Definitions of key terms used throughout the agreement

4. Purchase Price and Financing Terms: Total purchase price, amount being financed, and key financing terms including interest rate

5. Repayment Structure: Details of payment schedule, installment amounts, and payment methods

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

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

8. Covenants: Ongoing obligations of the Buyer/Borrower during the financing period

9. Events of Default: Circumstances constituting default and consequences

10. Remedies: Rights and remedies available to parties in case of default or breach

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

12. Notices: Process and addresses for formal communications between parties

13. Execution: Signature blocks and execution requirements

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

1. Personal Guarantee: Required when individual guarantors are backing the financing

2. Insurance Requirements: Included when specific insurance coverage is required for financed assets

3. Change of Control Provisions: Required when restrictions on business ownership transfer are needed

4. Subordination Terms: Included when there are other creditors and priority needs to be established

5. Business Operations Covenants: Required when Seller wants to maintain control over how business is operated during financing period

6. Tax Provisions: Detailed tax arrangements when complex tax implications exist

7. Early Repayment Terms: Include when early repayment options or penalties are part of the agreement

8. Force Majeure: Required when specific provisions for unforeseen circumstances are needed

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

1. Schedule A - Business Description: Detailed description of the business being sold and financed

2. Schedule B - Payment Schedule: Detailed amortization schedule showing all payments, interest, and principal

3. Schedule C - Collateral List: Itemized list and description of all assets serving as collateral

4. Schedule D - Financial Covenants: Specific financial metrics and requirements Buyer must maintain

5. Schedule E - Required Insurance: Detailed insurance requirements and coverage specifications

6. Appendix 1 - Form of Promissory Note: Standard form for the promissory note documenting the debt

7. Appendix 2 - Security Agreement Forms: Standard forms for security registration and fiduciary transfers

8. Appendix 3 - Guarantee Agreement: Form of personal or corporate guarantee if applicable

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Contract to Sell

Cost

Free to use
Relevant legal definitions




















































Clauses





































Relevant Industries

Retail

Manufacturing

Food and Beverage

Technology

Professional Services

Construction

Distribution

Wholesale Trade

Healthcare

Hospitality

Real Estate

Transportation and Logistics

Agriculture

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Risk Management

Compliance

Corporate Secretarial

Treasury

Business Development

Commercial

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Business Owner

Finance Director

Legal Counsel

Corporate Lawyer

Business Development Manager

Financial Controller

Managing Director

Commercial Director

Risk Manager

Compliance Officer

Investment Manager

Business Broker

M&A Advisor

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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