what happens if you default on a vendor note 
the repercussions of defaulting on a vendor note can vary depending on the arrangement and the terms of the vendor loan agreement the vendor can repossess the inventory or equipment that was sold as well as other assets of the business to recoup its losses the vendor may also be entitled to future cash flows of the business the bottom linea vendor note can be a good option for a business seeking to obtain inventory or equipment it is a particularly good option for a new business that does not have significant levels of cash or credit history to obtain a traditional bank loan vendor notes also establish a relationship between the vendor and a business that could be profitable to both in the future choosing a vendor note or traditional bank loan will depend on what is best for your business so it is important to weigh the pros and cons of each before making a commitment 