Document background
The Vendor Finance Contract is essential for businesses in Saudi Arabia seeking to finance the purchase of significant assets or equipment while maintaining Sharia compliance. This document type is particularly useful when vendors wish to provide financing options to their customers for large purchases, effectively combining the sale and financing aspects in a single, compliant structure. The contract must adhere to Saudi Arabian law and Islamic finance principles, including specific provisions for profit calculation instead of interest. It typically includes detailed sections on payment schedules, security arrangements, and ownership transfer mechanisms. The document is commonly used in large commercial transactions, especially in sectors requiring substantial equipment or asset purchases, and must incorporate both SAMA regulations and Sharia advisory approvals.
