Glossary · product

Vendor Program

Also called dealer program, point-of-sale financing, captive program, embedded finance.

Financing offered at the point of sale under the seller's brand, where the equipment dealer, software vendor or supplier presents the credit and a third party underwrites, funds and services it.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

The seller has an obvious interest in you being able to pay. A vendor program is the formalisation of that: a finance partner sits behind the sales process, approvals come back inside the sales conversation, and the documents are usually signed alongside the purchase order.

The usual structures

  • Referral. The vendor introduces you and is paid a referral fee. The lessor's brand appears on the paperwork
  • Private label. The program runs under the vendor's name; the funder is disclosed only in the documents
  • Vendor recourse or holdback. The vendor takes back some credit risk, or a reserve is held against losses, which is why a vendor sometimes approves what a bank would not
  • Captive finance. A manufacturer's own finance arm

Subsidised rates

A vendor can buy the rate down. The funder is paid its yield out of the equipment price, and the customer sees a low or zero advertised rate. Nothing improper about it, but it means the finance charge has moved into the invoice rather than disappeared.

Documents

The paper is an equipment finance agreement or a lease from the funder, plus a delivery and acceptance certificate. The vendor's salesperson does not underwrite it, cannot vary it, and is not a party to it.

Where this one catches people

Rate and price move together, so compare total delivered cost, not the rate. Ask for two quotes from the vendor in writing: the cash price, and the financed price at the advertised rate. If the cash price is materially lower, the "0 percent" is being paid for in the invoice, and outside finance against the cash price may cost less overall.

The second issue is who your promises came from. The vendor's assurances about installation dates, performance, training, service response and the right to cancel are the vendor's. The funder disclaims equipment warranties, and once you sign the delivery and acceptance certificate the obligation to pay is generally independent of whether the equipment does what the salesperson said. If the vendor fails, you still owe the funder. Keep any performance commitment in a separate written agreement with the vendor, and do not sign acceptance until the equipment is installed and working.

Where you will meet this term

Working Capital Term Loan Equipment Financing Credit Card Processing

Read next

Broker FeeWhat a broker is paid on a funded deal — commission from the funder, points deducted from your proceeds, mark… Buy rateThe price the funder is willing to fund at, before the broker's markup, with the gap between it and the rate … Delivery and Acceptance (D&A)The document confirming that equipment was delivered and is acceptable, which releases payment to the vendor,… Equipment finance agreement (EFA)A single-document equipment financing in which the business owns the equipment from day one and the funder ta… Equipment leaseA contract to use equipment for a period in exchange for rent, with the lessor holding title and the end-of-t… Hold harmless clauseA promise not to hold the other party responsible for specified losses, usually bundled with an indemnity and… Interim RentA charge covering the days between equipment acceptance or funding and the official lease commencement date, … Vendor financingFinancing arranged by the seller of equipment or goods, either from the vendor's own balance sheet or through… White LabelAn arrangement where one company's funding product is presented under another company's brand, so the name on…

Vendor Program — common questions

What does vendor program mean?

Financing offered at the point of sale under the seller's brand, where the equipment dealer, software vendor or supplier presents the credit and a third party underwrites, funds and services it.

Where does vendor program catch people out?

Rate and price move together, so compare total delivered cost, not the rate. Ask for two quotes from the vendor in writing: the cash price, and the financed price at the advertised rate. If the cash price is materially lower, the "0 percent" is being paid for in the invoice, and outside finance against the cash price may cost less overall.

Is vendor program the same as an interest rate?

Vendor Program is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does vendor program apply to?

Working Capital, Term Loan, Equipment Financing, Credit Card Processing.

Is there a worked example of vendor program?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside vendor program?

Broker Fee, Buy rate, Delivery and Acceptance, Equipment finance agreement, Equipment lease.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.