Floor Plan Financing Agreement for Australia

Floor Plan Financing Agreement Template for Australia

A comprehensive financing agreement governed by Australian law that establishes the terms and conditions under which a financial institution provides inventory financing to a dealer or retailer. The agreement covers credit facility terms, security interests over inventory, operational requirements, financial covenants, and enforcement rights, all structured in compliance with Australian financial services regulations, including the Personal Property Securities Act 2009 (Cth) and related legislation. It details inventory management requirements, payment mechanisms, reporting obligations, and default provisions specific to floor plan financing arrangements.

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What is a Floor Plan Financing Agreement?

The Floor Plan Financing Agreement is essential for businesses requiring significant inventory financing, particularly in sectors such as automotive, equipment, and large consumer goods. This agreement type is commonly used in Australia when dealers need to finance their inventory purchases while maintaining compliance with Australian financial services regulations. The document establishes the financing relationship, including credit terms, security interests under the Personal Property Securities Act 2009 (Cth), inventory management requirements, and dealer obligations. It's designed to protect the lender's interests while providing dealers with necessary working capital, incorporating specific provisions for Australian business practices and regulatory requirements. The agreement typically includes detailed schedules for facility limits, approved inventory types, and operational procedures, making it suitable for ongoing inventory financing arrangements.

What sections should be included in a Floor Plan Financing Agreement?

1. Parties: Identifies the finance provider and the dealer/retailer receiving the floor plan financing

2. Background: Outlines the context of the agreement, including the dealer's business and need for inventory financing

3. Definitions: Defines key terms used throughout the agreement, including financial terms, security-related concepts, and operational terminology

4. Facility Terms: Details the credit facility, including credit limit, purpose, and availability period

5. Security Interest: Establishes the security interest over the financed inventory and related assets

6. Drawdown and Payment Mechanisms: Specifies procedures for requesting financing and making payments

7. Interest and Fees: Details all interest charges, fees, and other costs associated with the facility

8. Inventory Management: Sets out requirements for stock control, rotation, and reporting

9. Representations and Warranties: Lists the dealer's representations regarding their business, authority, and financial condition

10. Covenants: Specifies ongoing obligations of the dealer, including financial covenants and operational requirements

11. Events of Default: Defines circumstances constituting default and consequences

12. Enforcement Rights: Details the finance provider's rights and remedies upon default

13. General Provisions: Contains standard contract clauses including governing law, notices, and amendment procedures

What sections are optional to include in a Floor Plan Financing Agreement?

1. Guarantees: Required when personal or corporate guarantees are part of the security structure

2. Multi-location Provisions: Needed when the dealer operates multiple locations under the same agreement

3. Foreign Currency Provisions: Required for international inventory purchases or multi-currency facilities

4. Insurance Requirements: Detailed insurance provisions when standard coverage terms are insufficient

5. Third-Party Rights: Required when other creditors or stakeholders have interests in the business

6. Electronic Trading Platform: Needed when the facility includes use of electronic inventory management systems

7. Subordination Provisions: Required when there are multiple lenders or complex priority arrangements

What schedules should be included in a Floor Plan Financing Agreement?

1. Facility Limits and Pricing: Details of credit limits, interest rates, fees, and charges

2. Approved Inventory List: List of approved inventory types/categories eligible for financing

3. Approved Locations: List of authorized locations for storing financed inventory

4. Reporting Requirements: Forms and templates for required periodic reports

5. Security Registration Details: PPSR registration information and other security details

6. Guarantor Information: Details of guarantors and guarantee terms if applicable

7. Insurance Requirements: Specific insurance requirements and minimum coverage levels

8. Operating Procedures: Detailed procedures for drawdowns, payments, and inventory management

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Automotive

Agricultural Equipment

Marine and Watercraft

Recreational Vehicles

Heavy Machinery

Construction Equipment

Electronics and Appliances

Manufacturing

Industrial Equipment

Wholesale Distribution

Relevant Teams

Legal

Finance

Treasury

Credit

Risk Management

Compliance

Operations

Dealer Operations

Commercial Banking

Asset Finance

Security Administration

Relationship Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Manager

Commercial Finance Manager

Dealer Principal

Operations Manager

Inventory Manager

Legal Counsel

Compliance Officer

Risk Manager

Relationship Manager

Business Development Manager

Floor Plan Administrator

Security Trustee 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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