Equipment Financing Agreement Template

This 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. Financing Terms

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. Equipment Description

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].

3. Security Interest and Collateral

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. Borrower Responsibilities

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. Representations

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. Default and Remedies

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. Notices

7.1 Notices. Notices must be delivered to the addresses above (or updated in writing).

8. Miscellaneous

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.

Signatures

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: ___________________________