Sign an equipment finance agreement online

Equipment Finance Agreement

1. The parties

2. The financed goods

3. Price and amount financed

The Borrower buys the goods from the Supplier and owns them from settlement. The Financier lends the amount financed and pays it straight to the Supplier on the Borrower's direction. Because the Borrower owns the goods, the Borrower claims any input tax credit for the GST on the purchase price in its own business activity statement.

4. Interest and repayments

5. What the Borrower pays over the term

6. Balance outstanding, year by year

7. The balloon at the end

The balloon keeps the monthly repayment lower than a fully amortising loan would, but it is a real debt and it is due in full on 12 October 2030. At least 90 days before that date the Financier writes to the Borrower to confirm the amount. The Borrower may pay it from its own funds, ask the Financier to refinance it under a new agreement, which the Financier may decline, or sell the goods and pay it from the proceeds with the Financier's written consent. Selling the goods for less than the balloon does not reduce what is owed.

8. Security over the goods

The Borrower grants the Financier a security interest in the goods, including every attachment, accessory, part, replacement and the proceeds of any dealing with them, to secure everything the Borrower owes under this agreement. The security interest is a purchase money security interest to the extent it secures the amount used to buy the goods.

The Financier may register a financing statement on the Personal Property Securities Register at any time, and the Borrower waives its right to receive a verification statement. The Borrower must not create or allow any other security interest over the goods, and must tell the Financier at once if anybody claims an interest in them.

9. Insurance

If the Borrower does not keep the cover in place, the Financier may arrange it and add the premium to the balance owing. A lapse of cover is a default under clause 13 whether or not the Financier arranges replacement cover.

10. Registration and identification

The serial number in clause 2 is recorded against the financing statement. The Borrower must not remove, alter or cover the serial plate or the Financier's identification decal, and must give the Financier the meter reading whenever it asks for it, which it will do no more than twice in any year.

11. Inspection

On three business days' notice the Financier, or an assessor it appoints, may inspect the goods at the depot or on a job site during working hours. An inspection is at the Financier's cost unless it finds the goods damaged, unserviced or somewhere the Borrower has not told the Financier about, in which case the Borrower pays the reasonable cost.

12. Looking after the goods

• Use the goods only in the Borrower's business, by competent and licensed operators, and within the manufacturer's limits for load, slope and attachments.
• Service the goods at the intervals in the operator's manual, by a qualified technician, and keep the service log and invoices for the whole term.
• Keep the goods in Tasmania. Moving them interstate for more than 30 days needs the Financier's written consent.
• Not sell, hire out, lend or part with possession of the goods, except to a repairer for repairs, without the Financier's written consent.
• Comply with every law, permit and safety requirement that applies to operating plant of this kind, including registration where the goods travel on a public road.
• Pay every tax, registration charge, fine and fee in connection with the goods when it falls due.

13. Things the Borrower tells the Financier about

14. Financial information

The Borrower gives the Financier its annual financial statements within 120 days of the end of each financial year while any amount is owing, and any further information about its financial position that the Financier reasonably asks for. The Financier keeps that information confidential and uses it only to manage this agreement.

15. Representations

The Borrower confirms that the information in its finance application was true and complete, that it has the power to enter this agreement and has done what its constitution requires to do so, that the goods are being acquired wholly or predominantly for business purposes, and that no default has happened and nothing is pending that would cause one.

16. Default

Each of these is a default:

• a repayment or the balloon is not paid within 7 days of its due date;
• the Borrower breaks another term and does not fix the breach within 14 days of a written notice asking it to;
• the goods are lost, destroyed or seized and are not repaired, replaced or recovered within 30 days;
• a representation in clause 15 or in the finance application turns out to be materially untrue;
• the Borrower becomes insolvent, an administrator, receiver or liquidator is appointed, or it ceases to trade;
• the Guarantor dies, becomes insolvent or disputes the guarantee in clause 20.

17. What the Financier may do after a default

After a default the Financier gives the Borrower written notice describing it and, where it can be fixed, at least 14 days to fix it. If the default is not fixed in that time, or cannot be fixed, the Financier may by further notice:

18. Default interest and enforcement costs

An overdue amount carries default interest at 2 per cent a year above the rate in clause 4, from the due date until it is paid, calculated daily. The Borrower pays the Financier's reasonable costs of enforcing this agreement, including repossession, transport, storage, auction and legal costs on a solicitor and own client basis. Any surplus from a sale, after everything owing is paid, goes to the Borrower or to whoever is entitled to it under the PPSA.

19. Fees, early payout and general terms

Early payout. The Borrower may pay out the agreement at any time on 10 business days' notice. The payout figure is the principal outstanding at the payout date, the balloon, interest to the payout date and the early payout administration fee. Because the rate is fixed, the Financier may also charge its reasonable break cost if wholesale rates have fallen since settlement, and it shows that amount in the payout quote.

GST. Amounts in this agreement are stated inclusive of GST where GST applies. Interest and the amount financed are input taxed financial supplies and carry no GST.

Business purpose. The Borrower declares the credit is to be applied wholly or predominantly for business purposes. The National Consumer Credit Protection Act 2009 and the National Credit Code therefore do not apply to this agreement, and the Borrower may lose protections it would otherwise have under that law.

Assignment and set off. The Financier may assign or transfer its rights under this agreement to another financier, and tells the Borrower in writing if it does; the Borrower's obligations do not change. The Borrower may not assign its rights. The Borrower makes every payment in full, without set off or counterclaim.

Notices and law. Notices may be given by email to the addresses on the finance application and are taken to be received on the next business day. This agreement is governed by the law of Tasmania. If any part of it is unenforceable, the rest continues. It may be signed electronically and in counterparts.

20. Guarantee and indemnity

In return for the Financier entering this agreement at the Guarantor's request, the Guarantor:

• guarantees that the Borrower will pay everything it owes under this agreement and perform every obligation in it, and will pay any amount the Borrower does not pay, on demand;
• indemnifies the Financier against any loss it suffers because the Borrower does not pay or perform, including where the Borrower's obligations are unenforceable for any reason;
• agrees the guarantee continues until everything is paid, and is not reduced if the Financier gives the Borrower more time, varies the repayments or releases another security;
• agrees the Financier may claim against the Guarantor without first claiming against the Borrower or selling the goods.

A guarantee of this kind can be called on long after it is signed. If the Borrower stops paying in 2029, the Financier may demand the whole balance owing and the balloon from the Guarantor at that point, together with enforcement costs, and may do so before or instead of repossessing the excavator. The Guarantor's own assets, including her home, may be at risk if she cannot pay.

21. Execution

The Borrower executes this agreement under section 127 of the Corporations Act 2001 by its sole director, who is also its sole company secretary. The Financier executes it by an authorised officer. The envelope is signed in order: the Borrower's director first, then the Guarantor, then the Financier, so the Financier's signature is the last act and settlement follows it.

22. Checklist before settlement

23. Privacy and credit information

The Borrower's director and the Guarantor each consent to the Financier collecting their personal and credit information, obtaining a commercial credit report on the Borrower and a consumer credit report on each of them to assess this agreement and the guarantee, and disclosing default information to a credit reporting body if a payment becomes overdue. The Financier handles that information under the Privacy Act 1988 and its credit reporting policy.

24. Entire agreement

This document, the finance application and the direct debit request are the whole agreement about the finance. No statement by the Supplier about the goods, their performance or their resale value forms part of it, and the Borrower's obligations to the Financier do not depend on the goods performing as the Supplier said they would.