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Vendor Finance Agreement for Australia

Vendor Finance Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that establishes the terms and conditions under which a vendor provides financing to a purchaser for the acquisition of goods or equipment. The document combines elements of a sale agreement with financing provisions, including security interests under the Personal Property Securities Act 2009 (Cth), payment terms, interest calculations, and enforcement rights. It ensures compliance with Australian consumer credit laws where applicable and includes provisions for risk allocation, title transfer, and default remedies.

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What is a Vendor Finance Agreement?

The Vendor Finance Agreement is utilized when a vendor wishes to facilitate sales by offering direct financing to purchasers, particularly for high-value equipment or goods. This arrangement is common in Australian business transactions where traditional bank financing may not be the preferred option. The agreement must comply with Australian financial services regulations, including the National Consumer Credit Protection Act 2009 (Cth) and the Personal Property Securities Act 2009 (Cth). It typically includes detailed provisions about the goods being sold, financing terms, security interests, payment schedules, and default procedures. The document is crucial for vendors looking to expand their sales capabilities while maintaining security over the financed goods until full payment is received.

What sections should be included in a Vendor Finance Agreement?

1. Parties: Identifies and defines the vendor (finance provider) and purchaser (borrower), including full legal names and addresses

2. Background: Sets out the context of the agreement, including the vendor's business, the goods being sold, and the financing arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Sale and Purchase: Details the goods being sold and purchased, including specifications and delivery terms

5. Finance Terms: Specifies the purchase price, deposit, interest rate, payment schedule, and total amount payable

6. Security Interest: Establishes the vendor's security interest in the goods until full payment is received

7. Payment Terms: Details payment mechanics, methods, timing, and consequences of late payment

8. Title and Risk: Specifies when title passes to the purchaser and allocation of risk in the goods

9. Representations and Warranties: Sets out representations and warranties from both parties

10. Default and Enforcement: Defines events of default and the vendor's enforcement rights

11. Termination: Specifies circumstances and process for termination of the agreement

12. General Provisions: Standard boilerplate clauses including notices, governing law, and dispute resolution

What sections are optional to include in a Vendor Finance Agreement?

1. Guarantee: Required when a third party guarantees the purchaser's obligations

2. Insurance: Detailed insurance requirements when specific insurance coverage is mandatory

3. Maintenance and Use: Required for goods requiring specific maintenance or usage requirements

4. Early Repayment: Include when early repayment options are offered

5. Assignment and Novation: Required when either party may need to transfer their rights or obligations

6. Additional Security: Include when additional security beyond the goods is required

7. Commission Structure: Required when intermediaries or agents are involved in the sale

8. Cross-Collateralization: Include when security interests extend to other agreements between the parties

What schedules should be included in a Vendor Finance Agreement?

1. Schedule 1 - Goods Description: Detailed description of goods including specifications, serial numbers, and conditions

2. Schedule 2 - Payment Schedule: Detailed breakdown of payment amounts, due dates, and interest calculations

3. Schedule 3 - Delivery Details: Specific delivery instructions, timing, and locations

4. Schedule 4 - Maintenance Requirements: Detailed maintenance schedules and requirements if applicable

5. Schedule 5 - Insurance Requirements: Specific insurance requirements and minimum coverage details

6. Schedule 6 - Security Registration Details: PPSR registration details and requirements

7. Appendix A - Credit Application: Purchaser's credit application and assessment details

8. Appendix B - Guarantee Deed: If applicable, the guarantee deed for third-party guarantors

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok˰ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

tiktok˰

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions















































Clauses







































Relevant Industries

Manufacturing

Construction

Agricultural Equipment

Industrial Machinery

Technology and IT Equipment

Medical Equipment

Transportation and Heavy Vehicles

Mining Equipment

Renewable Energy Equipment

Office Equipment

Telecommunications Equipment

Relevant Teams

Legal

Finance

Credit

Sales

Risk Management

Compliance

Treasury

Commercial Operations

Business Development

Asset Management

Relevant Roles

Chief Financial Officer

Finance Manager

Credit Manager

Commercial Director

Sales Director

Legal Counsel

Contracts Manager

Risk Manager

Credit Analyst

Business Development Manager

Equipment Finance Specialist

Commercial Finance Manager

Asset Finance Manager

Treasury Manager

Compliance Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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