Deferred Payment Guarantees
When the whole or part of a business is bought or sold it is an increasingly common practice for part of the purchase price to be deferred, leaving the Seller somewhat exposed over that extended period.
Purchasing an insurance policy to protect against the failure of these payments being made is very difficult. Few insurers have any sort of appetite for the risk.
QPI can provide innovative solutions to this issue making the negotiation and conclusion of a business sale and purchase agreement faster, less stressful and most importantly more secure.
What is a Deferred Payment Guarantee?
- The Deferred Payment Guarantee (“DPG”) is NOT an insurance policy. It is arranged in the surety market and so is not subject to the restrictive exclusions and conditions associated with Deferred Consideration Insurance.
- The DPG acts as a guarantee, not an insurance policy, which provides contract comfort between two commercial parties.
- The DPG is set up primarily to protect the Seller of a business who has been required by the Buyer to agree a deferred consideration on completion, whereby the Buyer defers paying some of the sale price over an agreed period of time.
- The DPG provides a guarantee to the Seller that he will receive the full deferred amount, whether the new owner of the business succeeds or not, providing financial security for the seller.
Don’t let your clients deals get broken and waste your fee-earning time, use QPI to seal the deal!
QPI……expertise in deal making you should expect!
For more information, contact Richard Grayson on 01604 712222 or e-mail guarantee@qpilegal.co.uk