When the Whole or Part of a Business is Bought or Sold it is common practice that the Purchase Price is paid by Instalments or Deferred over a Period of Time. During this extended Payment Period, the Vendor may feel exposed. CHJ Management are experienced in the provision of hard to secure Deferred Payment Guarantees making the negotiation and conclusion of a Business Sale and Purchase Agreement Faster, less Stressful and most importantly more Secure.
CHJ Management is frequently asked by Clients to arrange Various Forms of Performance Bonds or Guarantees; Most of these are ‘Standard’ Requirements to the Contract. But, there are times when providing a Third Party Guarantee actually facilitates and forms a Substantial Part of the Transaction, by being the guaranteed basis of an Agreement put in place for the benefit of both Contracting Parties and providing a Level of Confidence that might not otherwise be found.
Deferred Payment Guarantees are Agreements whereby in return for a Fee, the Surety undertakes to pay a Sum of Money to the Beneficiary, unless the Party being Guaranteed fully Performs their Contractual Obligations. The Party being Guaranteed (Client of the Bond) in turn provides a Counter Indemnity to the Surety. An example of this is, when an Entrepreneur undertakes to purchase a Whole or Part of a Business, perhaps as part of a Management Buyout. It is common practice for at least part of the agreed Purchase Price to be paid in Instalments. There can be confidence issues in these Commercial Transactions.
Deferred Payment Guarantees resolve these Issues and assure the Integrity of the Transaction by way of Third Party Surety, giving the required Level of Confidence and Comfort to Conclude the Deal. It is clear that Companies are turning to Conditional Bonds and Guarantees in preference to Bank Guarantees for a Number of Reasons; Bonds can be arranged very quickly, They do not impact on Credit Facilities with the Bank and very often have a Positive Effect on Cash Flow, plus the Nature of a Conditional Bond can substantially reduce the risk of abuse. CHJ Management can arrange these Bonds. The CHJ Management Team is always available to assist with any Enquiry.