Example of Financing Contingency Clause in IOI or LOI?

November 07, 2020

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Florida, USA

Would appreciate anyone who can share a sample financing contingency to be incorporated into an IOI or LOI. Thanks in advance.

3 Likes

7 Replies

206 Views

Replies

Reply by a lender
from Nova Southeastern University in Fort Lauderdale, FL, USA

Here is another but similar: Contingencies to closing: Buyer's ability to obtain a loan approval for the purchase of the assets. The Loan amount will be in the principal amount of $XX,XXX. The Buyer shall contribute equity in the sum of $XX,XXX equal to 10% of the purchase price. In the event that the buyer has been unable to secure financing in XX days and provide proof of a term sheet from a Lender acceptable to Buyer, in its sole discretion, Buyer may terminate this Letter of Intent without liability to Seller. Hope this helps - Bruce

Reply by a searcher
from University of Illinois at Chicago in Madison, WI, USA

Here's one that I've used: The Transaction will be financed with a combination of debt and equity. The equity will be funded by myself as well as certain members of my network. The remaining funds necessary to finance the transaction will come from borrowings from a third-party institution (“Bank Debt”) and the Seller Note(s). Buyer will provide proof of funds for the equity within 48 hours of execution of this letter and will have six (6) weeks from the signing of this letter to obtain proof of financing from a lender.

+5 more replies.

Join the discussion