Vendor Note

Filed Under » ,
Dictionary Says

Definition of 'Vendor Note'

A type of debt instrument used in a particular type of short-term loan agreement in which the seller of goods or merchandise sells them to the buyer, but also provides financing for the buyer in the form of a vendor note. The loan is secured by the inventory being sold to the buyer as well as pledges of the buyer's business assets and similar forms of security used to help lessen the perceived risk of the buyer's default.

Also known as a seller note.
Investopedia Says

Investopedia explains 'Vendor Note'

Vendor notes can be a useful and convenient form of financing, particularly when well-established sellers with diverse customer bases are taking on new, smaller buyers who typically have small amounts of working capital with which to purchase inventory. The use of vendor financing can make it easier for a company to increase its sales volume, but in doing so it also incurs the risk of the buyers it finances not paying back their loans.

Vendor notes vary in terms of their time to maturity, but notes with time horizons in the range of three to five years are considered common. Many different types of terms and conditions can be built into a vendor note, such as limitations on the types of business practices the buyer can engage in, restrictions on acquiring other inventory or business assets and requirements that specific financial ratios or benchmarks be maintained.
Search results for

'Vendor Note'

  • Check Your Credit Report

    http://www.investopedia.com/articles/pf/07/credit-report.asp
    ... Note: Incorrect bankruptcy information (especially the date the bankruptcy was incurred)
    is a ... was established due to a misunderstanding with a vendor (and/or ...

  • Shopping Online: Convenience, Bargains And A Few Scams

    http://www.investopedia.com/articles/pf/08/buy-sell-online.asp
    ... Trying to rectify an incorrect order with a vendor through the internet can be a ...
    That said, it is important to note that while they might be smaller in number ...

  • New Year's Planning For Business Owners

    http://www.investopedia.com/articles/pf/08/planning-for-business.asp
    ... (Note: Your state's insurance commissioner and even the local phone book ... perspectives -
    such as insurance, retirement planning, staffing, vendor and equipment ...

  • Do-It-Yourself Analyst Predictions

    http://www.investopedia.com/articles/07/mosaic-theory.asp
    ... (Note: This is an approximation because it takes time to ramp up sales.) Taking ... Also,
    in order to get into a large distributor, the vendor must often reduce ...

  • The Basics Of Travel Insurance

    http://www.investopedia.com/articles/pf/08/travel-insurance.asp
    ... pays the difference between the refund you get from the vendor and the ... Note: Check
    to see what preexisting medical conditions, if any, are excluded before you ...

  • Build Your Small Business During Downswings

    http://www.investopedia.com/articles/pf/08/small-business-recession-tips.asp
    ... a good relationship with your current vendor, consider talking to your vendor to
    request a ... It is important to note that because of higher net income, FIFO will ...

  • Financial Statements: Cash Flow | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements3.asp
    ... A Note Regarding Taxes We do not need to subtract taxes separately from any of ... billion
    in additional operating cash in 2003 by holding onto vendor bills rather ...

  • Immediate Annuities: Guaranteed Payout At A Price?

    http://www.investopedia.com/articles/retirement/08/immediate-annuity.asp
    ... can shop for others and then transfer the money to the vendor you think ... Note that
    the table includes different life expectancy factors (for each age) for men ...

  • Rocky Road Ahead For Rocky Mountain Chocolate Factory

    http://stocks.investopedia.com/stock-analysis/2011/Rocky-Road-Ahead-For-Rocky-Mountain-Chocolate-Factory-RMCF-BRK-A-BRK-B-HSY-TR0513.aspx
    ... It closed out its fiscal year on a high note, with profits growing for the ... recently
    entered into a number of co-branding agreements with the ice cream vendor. ...

  • The History Of Consumer Credit Rights

    http://www.investopedia.com/articles/pf/08/credit-billing-act.asp
    ... Under the act, the credit card company can put a note on your credit report about
    non-payment, but it must also state that you're refusing to pay because you ...

Related Articles

Partner Links