Finance Agreement – Financial Lease Agreement
A Financial Lease Agreement is intended to be used by a lender that finances goods (such as vehicles, equipment, office furniture etc) for people on a financial rental basis. Provision is made for ownership in the goods to pass to the lessee at the end of the rental period, if this is what the lender and borrower agree. The Pre-Proposal Quotation and Finance Agreement have been drafted with the National Credit Act in mind.
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FINANCIAL LEASE AGREEMENT
With a Pre-Agreement Proposal
(in terms of the NCA)
Summary A Financial Lease Agreement is intended to be used by a lender that finances goods (such as vehicles, equipment, office furniture etc) for people on a financial rental basis. Provision is made for ownership in the goods to pass to the lessee at the end of the rental period, if this is what the lender and borrower agree.
The NCA-required Pre-Agreement Quotation is included with this document.
Why would I need a Financial Lease Agreement? A Finance Agreement may be used when a person finances goods for someone else, on the basis that ownership in the goods may pass to the lessee at the end of the period. For example, giving finance for computers, furniture, audio goods, vehicles etc. This Finance Agreement provides for the payment of a rental for a specific term with regular payment obligations.
What does the template agreement say?
The Pre-Agreement Proposal addresses: Description of goods; Finance details; Finance term; Rental; Residual value.
The Financial Lease Agreement addresses: Definitions; Suspensive Conditions; Lease of Goods; Delivery and Risk; Insurance; Security; Use; Fees and Charges; Interest; Rentals; Early termination; Customer warranties and undertakings; Default; Consents; Delivery address; General.
The Pre-Proposal Quotation and Finance Agreement have been drafted in accordance with our interpretation of the National Credit Act.
How long is the Financial Lease Agreement? The template Pre-Agreement Proposal can be printed onto three pages, and the template Financial Lease Agreement can be printed onto ten pages.
What do you need to do to use the Financial Lease Agreement?
- Read the template documents to ensure that they suit your requirements. Make changes as required.
- Complete the relevant details in the Pre-Agreement Proposal and the Finance Agreement as they pertain to the borrower.
- Ensure that the documents are signed by both the financier and the borrower.
Before signing this agreement, the financier is advised to conduct a comprehensive financial and credit check on the borrower, and get the borrower to complete a separate application form for a credit facility.
Also viewed: Instalment Sale Agreement
This Agreement is intended to be used in transactions where the National Credit Act applies. While it has been drafted in accordance with our interpretation of the legislation, we recommend that you obtain independent advice before using a Financial Lease Agreement. Agreements Online will not be liable for any damages you may suffer due to non-compliance with any regulatory requirements.
Synonymous with: Finance Agreement; Lease Agreement; Financial Rental Agreement; Rent-to-Own Agreement; Loan Agreement
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