Vendor take-back (VTB)
A vendor take-back is seller financing: part of the price is lent by the seller to the buyer and repaid over time, usually with interest and security
A vendor take-back, often shortened to VTB, is a loan from the seller to the buyer for part of the purchase price. Instead of receiving the whole price at closing, the seller receives a portion in cash and the rest over an agreed period, with interest, usually secured against the business or its assets and often ranking behind the bank's security.
Vendor financing is common in BC business sales, especially on Main Street deals, because buyers rarely have the full price and lenders often expect the seller to carry part of the risk. A VTB signals the seller's confidence in the business, bridges the gap between bank financing and the price and can allow a higher price than an all-cash deal. The trade-off for the seller is that the money is at risk if the buyer fails.
In practice the terms matter: the amount, interest rate, repayment schedule, security, personal guarantees, what happens on default and how the VTB ranks against bank debt. The seller's lawyer documents these. We advise on the commercial structure, model what the seller nets under different scenarios and compare a VTB against a lower all-cash price. A seller should also look hard at the buyer's experience and finances before agreeing to lend to them.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.