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Glossary of Terms

Set out below is a Glossary of standard transactional terminology for private equity and corporate finance transactions. Use the filter menu if you are looking for a specific term, or to navigate the Glossary alphabetically.

Deferred considerationThe purchaser agrees to pay part of the purchase price at a future date rather than paying the full purchase price at completion. It usually has conditions attached to the instalments such as whether certain performance criteria are met by the newly acquired company. The consideration can be made in different ways such as cash or shares.

Loan notesThese may be offered by the purchaser of the company shares to the seller agreeing to make payments to the holder of the loan notes at a specified date. It is a form of deferred payment.

Vendor financeThis can be in the form of either deferred loans or shares. This type of finance is often used when the vendor's expectation of the value of the business is higher than that of the management and the supporting institutions.