Loan Against Lease Agreement for Australia

Loan Against Lease Agreement Template for Australia

A Loan Against Lease Agreement is a specialized financial instrument used in Australian jurisdiction where a lease is provided as security for a loan facility. This agreement combines elements of both lending and property law, structured to comply with Australian banking regulations, the Personal Property Securities Act (PPSA), and relevant state/territory property legislation. The document establishes the terms of the loan, details of the lease being used as security, enforcement mechanisms, and the rights and obligations of all parties involved. It includes specific provisions for security registration, default scenarios, and remedies available under Australian law.

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What is a Loan Against Lease Agreement?

The Loan Against Lease Agreement is utilized when a borrower seeks to leverage their leasehold interest as security for a loan facility. This arrangement is common in commercial property scenarios in Australia where businesses or individuals hold valuable long-term leases. The document must comply with Australian financial services regulations, property law, and the Personal Property Securities Act (PPSA). It typically includes detailed provisions about the loan terms, security arrangements, borrower obligations, and enforcement rights. The agreement is particularly relevant in situations where the lease has significant commercial value or where traditional property security is not available. The document needs to carefully balance the interests of the lender in securing their loan while protecting the borrower's rights under the lease arrangement.

What sections should be included in a Loan Against Lease Agreement?

1. Parties: Identifies and defines the Lender, Borrower, and any guarantors

2. Background: Sets out the context of the agreement, including details of the existing lease and the purpose of the loan

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles for the agreement

4. Loan Details: Specifies loan amount, interest rate, term, and repayment schedule

5. Security Interest: Details how the lease is being used as security and the nature of the security interest

6. Lease Details: Describes the lease being used as security, including property details and lease terms

7. Representations and Warranties: Statements by the borrower regarding their authority, lease ownership, and other material facts

8. Borrower Covenants: Ongoing obligations of the borrower regarding the lease and loan payments

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

10. Enforcement Rights: Lender's rights and remedies upon default, including rights over the lease

11. PPSA Provisions: Specific provisions required under the Personal Property Securities Act

12. General Provisions: Standard clauses covering notices, amendments, governing law, etc

What sections are optional to include in a Loan Against Lease Agreement?

1. Guarantor Provisions: Required when there is a guarantor for the loan, detailing guarantor obligations and rights

2. Insurance Requirements: Included when specific insurance coverage is required for the leased property

3. Assignment and Subletting: Needed when transfer rights of the lease or loan need to be specifically addressed

4. Property Management Obligations: Include when borrower has specific obligations regarding property maintenance

5. Cross-Collateralization: Required when multiple leases or properties are used as security

6. Special Purpose Vehicle Provisions: Include when the borrower is a special purpose vehicle

7. Step-In Rights: Required when lender needs right to take over lease in specific circumstances

What schedules should be included in a Loan Against Lease Agreement?

1. Schedule 1 - Loan Terms: Detailed breakdown of loan amount, interest calculations, and repayment schedule

2. Schedule 2 - Lease Details: Copy or summary of the lease agreement being used as security

3. Schedule 3 - Property Details: Detailed description of the leased property including title references

4. Schedule 4 - Repayment Schedule: Detailed payment dates and amounts

5. Schedule 5 - Security Registration Details: PPSA registration and other security registration information

6. Appendix A - Required Insurance: Specific insurance requirements and minimum coverage levels

7. Appendix B - Tenant Details: Information about any existing tenants and sub-leases

8. Appendix C - Form of Notice: Template notices for various scenarios under the agreement

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

Loan Agreement

Sector

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Commercial Real Estate

Property Development

Retail

Industrial & Manufacturing

Healthcare

Hospitality & Tourism

Professional Services

Infrastructure

Agriculture

Relevant Teams

Legal

Finance

Risk Management

Property Management

Corporate Banking

Credit Assessment

Compliance

Treasury

Real Estate

Operations

Relevant Roles

Chief Financial Officer

Finance Manager

Property Manager

Legal Counsel

Commercial Lawyer

Risk Manager

Credit Manager

Corporate Banker

Property Finance Specialist

Lease Administrator

Commercial Property Agent

Treasury Manager

Compliance Officer

Senior Loan Officer

Real Estate Finance Manager

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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