Vendor finance
Financing provided by an equipment supplier or its finance arm to help a customer buy its products.
How it works
Vendor finance is credit provided by an equipment supplier, or its finance arm, to help a customer buy its products. It may take the form of deferred payment terms, a loan or a lease.
In GPU and data centre deals
GPU and server suppliers have offered vendor finance to neoclouds, and chip manufacturers have also supported customers through equity investments and capacity commitments. For other lenders, vendor finance raises intercreditor questions: whether the supplier keeps title or security over the equipment, and how its claim ranks against the senior lenders.
What gets negotiated
- Title retention or security over the supplied equipment
- Ranking against the senior facility
- Payment terms and deferral
- Whether the vendor also has an equity or customer relationship with the borrower
In the filed deals
Nscale's S-1 includes a global framework agreement with Dell Financial Services.
For in-house counsel
Take it to the documents
The filed wording behind GPU and data centre financings, for either side of the table. Previews are open; the full text is free with InfraCompute Weekly.
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
- Contract libraryGPU contracts, leases, power, equity and JVs, quoted from filed contracts.
- Issues list builderBuild an issues list from the lender’s or the borrower’s side.
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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