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ApplyThis Equipment Financing Agreement (the “Agreement”) is entered into as of [Effective Date] by and between:
Lender: [Lender Legal Name], with an address at [Address] (“Lender”).
Borrower: [Borrower Legal Name], with an address at [Address] (“Borrower”).
Lender and Borrower may be referred to individually as a “Party” and collectively as the “Parties.”
1.1 Principal Amount. The principal loan amount is $[Amount] (the “Loan”).
1.2 Purpose. Borrower will use the Loan to purchase the equipment described in Section 2 (the “Equipment”).
1.3 Interest Rate. Interest rate: []% per year ☐ Fixed ☐ Variable (index: [] + margin: [**]%).
1.4 Term. Loan term: [**] months/years.
1.5 Payment Schedule. Payments: $[] per ☐ month ☐ quarter, due on the [] day of each period, starting [Date].
1.6 Prepayment. Prepayment is: ☐ Allowed without penalty ☐ Allowed with fee: [**] ☐ Not allowed until [Date].
1.7 Late Fees. Late fee: $[] or []% after [**] days, if permitted by law.
1.8 Application of Payments. Payments applied to: ☐ Costs/fees ☐ Interest ☐ Principal (or as required by law).
2.1 Equipment. The financed equipment includes:
Type: [Equipment type]
Make/Model: [Make/Model]
Serial/VIN: [Serial numbers]
Quantity: [__]
Location of Equipment: [Address]
2.2 Purchase Details. Vendor/seller: [Vendor name]. Purchase price: $[__].
2.3 Delivery. Expected delivery date: [Date].
Type: [Equipment type]
Make/Model: [Make/Model]
Serial/VIN: [Serial numbers]
Quantity: [__]
Location of Equipment: [Address]
2.2 Purchase Details. Vendor/seller: [Vendor name]. Purchase price: $[__].
2.3 Delivery. Expected delivery date: [Date].
3.1 Security Interest. Borrower grants Lender a security interest in the Equipment (and proceeds) as collateral for the Loan, to the extent permitted by law.
3.2 Perfection (Optional). Borrower authorizes Lender to file financing statements (e.g., UCC-1) and take actions needed to perfect the security interest.
3.3 Title (Optional). Title to Equipment is held by: ☐ Borrower ☐ Lender until paid ☐ Other: [Rule].
3.4 No Liens. Borrower will not allow other liens on the Equipment without Lender’s consent.
4.1 Maintenance. Borrower will maintain the Equipment in good condition and follow manufacturer recommendations.
4.2 Insurance. Borrower will maintain insurance covering the Equipment (replacement value) and liability, naming Lender as loss payee/additional insured where applicable.
4.3 Use. Borrower will use the Equipment lawfully and not misuse it.
4.4 Location Changes. Borrower will not move the Equipment from the stated location without: ☐ Notice ☐ Lender consent.
4.5 Inspections. Lender may inspect the Equipment with reasonable notice.
5.1 Authority. Borrower has authority to enter into this Agreement.
5.2 Information Accuracy. Borrower information provided to Lender is accurate to the best of Borrower’s knowledge.
6.1 Events of Default. Default includes: missed payments, breach of this Agreement, insolvency/bankruptcy, unauthorized sale of Equipment, or material misrepresentation.
6.2 Remedies. Upon default, Lender may (as permitted by law): accelerate the Loan, repossess the Equipment, sell collateral, and recover costs and attorneys’ fees (if allowed).
6.3 Cure Period (Optional). Borrower has [__] days to cure monetary default after notice (if required).
7.1 Notices. Notices must be delivered to the addresses above (or updated in writing).
8.1 Governing Law. This Agreement is governed by the laws of [State/Country].
8.2 Entire Agreement. This Agreement is the entire agreement about the equipment financing.
8.3 Amendments. Amendments must be in writing and signed by both Parties.
8.4 Severability. If any provision is unenforceable, the remainder remains effective.
8.5 Electronic Signatures. Electronic signatures are effective.
By signing below, the Parties agree to this Equipment Financing Agreement as of the Effective Date.
Lender: [Lender Legal Name]
Authorized Signatory: [Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
Borrower: [Borrower Legal Name]
Authorized Signatory: [Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
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For quick answers, scroll below to see the FAQ.
Frequently asked
An Equipment Financing Agreement is a contract where a lender finances a borrower’s purchase of equipment, and the borrower repays the loan over time with interest. The equipment typically serves as collateral, and the lender may have security rights if the borrower defaults.
Financing is usually a loan: the borrower purchases (or will purchase) the equipment and repays the lender. A lease is usually a rental arrangement where the lessor owns the equipment and the lessee pays to use it. This template is for financing (loan + security), not a lease.
Key terms include: financed amount, interest rate, repayment schedule, equipment description, security interest/collateral, insurance requirements, maintenance responsibilities, default events, remedies, and prepayment rules.
Often yes. Many lenders require a security interest and may file a UCC-1 (or similar) to perfect the lien. This template includes a security interest section, but filing requirements depend on jurisdiction.
Common remedies include accelerating the debt (making the full balance due), repossessing the equipment, and charging late fees or collection costs, as allowed by law. This template includes default and remedy terms you can customize.
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