Equipment Financing Agreement
Overview of this form
The Equipment Financing Agreement is a legal document that outlines the terms under which a debtor agrees to secure financing for equipment. This agreement is essential for businesses acquiring machinery or tools through borrowed funds. By establishing a security interest in the equipment being financed, the lender ensures their investment is protected, differentiating it from other common financing documents like loans or leases.
What’s included in this form
- Equipment Security Interest: Details the secured party's interest in the equipment funded by financing.
- Debtor's Obligations: Outlines the repayment terms and conditions for the debtor.
- Installment Payments: Specifies the repayment schedule, including timing and amounts due.
- Insurance Requirements: Mandates the debtor to maintain comprehensive insurance on the equipment.
- Indemnity Clause: Obligates the debtor to protect the secured party from certain liabilities.
When to use this form
This Equipment Financing Agreement should be used when a business requires financing to purchase equipment, such as machinery, vehicles, or technology. It is relevant for businesses seeking to manage cash flow while acquiring essential tools for operations. The agreement provides assurance to the lender that they have a claim to the equipment if the debtor defaults.
Who should use this form
- Businesses seeking to finance the purchase of equipment.
- Entrepreneurs or small business owners looking for funding options.
- Lenders or financial institutions providing capital to businesses.
How to prepare this document
- Identify the parties involved: Enter the names and addresses of the secured party (lender) and the debtor (borrower).
- Specify the equipment: List the items of equipment being financed in the designated schedules.
- Outline repayment details: Fill in the installment payment amounts and due dates as agreed upon.
- Include insurance information: Indicate the insurance coverage requirements for the financed equipment.
- Sign and date the agreement: Ensure that both parties sign and date the agreement to validate it.
Is notarization required?
Notarization is not commonly needed for this form. However, certain documents or local rules may make it necessary. Our notarization service, powered by Notarize, allows you to finalize it securely online anytime, day or night.
Get your form ready online
Our built-in tools help you complete, sign, share, and store your documents in one place.
Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to list all items of equipment in the attachment schedules.
- Not specifying payment terms clearly, leading to confusion later.
- Neglecting to sign the agreement or providing an incomplete signature block.
Benefits of using this form online
- Convenience: Quickly download and fill the form as needed.
- Editability: Customize the agreement terms easily to fit your specific financing arrangement.
- Reliability: Ensure the use of professionally drafted templates by licensed attorneys.
Looking for another form?
Form popularity
FAQ
In simple terms, equipment leasing has some similarities to an equipment loan, however it's the lender that buys the equipment and then leases (rents) it back to you for a flat monthly fee. Most equipment leases come at a fixed interest rate and fixed term to keep those payments the same every month.
EFA: An EFA, or equipment finance agreement, is a type of business loan where the customer takes ownership of the equipment upfront, and then pays the lender monthly, annually or under a schedule agreed on by both parties. It's similar to financing a car.
Equipment financing refers to a loan used to purchase business-related equipment, such as a restaurant oven, a vehicle or a copier scanner. Equipment loans provide for periodic payments that include interest and principal over a fixed term.
Equipment Loan Terms Terms are typically 1272 months and will vary by loan option and lender.
Equipment loans. Best for: Newer businesses that need equipment financing to expand operations. Term loans. Small Business Administration CDC/504 loans. Small business line of credit. Business credit card.
How Does Equipment Financing Work?Equipment loans provide for periodic payments that include interest and principal over a fixed term. As security for the loan, the lender may require a lien on the equipment as collateral against your debt. Once the loan is paid in full, you own the equipment free of any lien.
An equipment finance agreement (EFA) is like a loan, security agreement, and promissory note all packaged together into a single document. EFAs also contain some unique features that make them one of the most popular and versatile equipment financing options.
An EFA is simply a loan and security agreement by another name. Unlike a non-true lease, the transaction is stated to be in the nature of a loan or financing rather than a lease of personal property and an EFA is much clearer on its face as to the parties' intention.
