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Floor Plan Financing Agreement for Indonesia

Floor Plan Financing Agreement Template for Indonesia

A Floor Plan Financing Agreement under Indonesian law is a specialized financing arrangement where a lender provides funding to a dealer to purchase inventory for display and sale. The agreement is governed by Indonesian civil law and financial services regulations, particularly Law No. 42 of 1999 on Fiduciary Security and OJK regulations. It establishes the terms of the revolving credit facility, security arrangements over the inventory, operational requirements for the dealer, and the lender's monitoring rights. The document includes detailed provisions for inventory management, reporting requirements, and security enforcement mechanisms compliant with Indonesian law.

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What is a Floor Plan Financing Agreement?

Floor Plan Financing Agreements are essential documents in inventory-based businesses where dealers require financing to maintain their display stock. This agreement type is commonly used in Indonesia by financial institutions to provide revolving credit facilities to dealers, particularly in sectors such as automotive, electronics, and heavy equipment. The Floor Plan Financing Agreement establishes the legal framework for the financing relationship, including credit terms, security arrangements, and operational requirements. It must comply with Indonesian financial regulations, particularly OJK requirements and secured transaction laws. The document is crucial for businesses that need to maintain substantial inventory levels but prefer to finance their stock rather than purchase it outright. It includes comprehensive provisions for inventory management, monitoring, reporting, and security enforcement, all structured within the Indonesian legal framework.

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

1. Parties: Identification of the finance provider and the dealer/borrower

2. Background: Context of the agreement and general purpose of the floor plan financing arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Facility and Purpose: Details of the financing facility, credit limit, and permitted purposes

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Security Arrangements: Details of security interests over inventory and other collateral

7. Utilization and Payment: Procedures for drawing down the facility and making repayments

8. Interest and Fees: Interest rates, calculation methods, and applicable fees

9. Dealer Covenants: Ongoing obligations of the dealer regarding inventory management and business operations

10. Representations and Warranties: Standard declarations about legal capacity, authority, and business condition

11. Events of Default: Circumstances constituting default and consequences

12. Inspection and Monitoring Rights: Lender's rights to inspect inventory and financial records

13. Insurance Requirements: Mandatory insurance coverage for financed inventory

14. Termination: Provisions for ending the agreement and consequences

15. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

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 dealer operates multiple locations under the same agreement

3. Cross-border Provisions: Required for dealers importing inventory from overseas suppliers

4. Digital Platform Integration: Included when the financing arrangement involves integration with digital inventory management systems

5. Subordination Arrangements: Needed when there are multiple creditors requiring priority arrangements

6. Floor Plan Auditor: Required when third-party auditor is appointed for inventory monitoring

7. Special Industry Requirements: Specific provisions for particular industries (e.g., automotive, electronics)

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

1. Schedule 1 - Facility Details: Specific terms of the facility including credit limit, interest rates, and fees

2. Schedule 2 - Approved Inventory: List of types of inventory approved for financing

3. Schedule 3 - Security Documents: List and copies of all security documents

4. Schedule 4 - Utilization Request Form: Standard form for requesting drawdowns under the facility

5. Schedule 5 - Reporting Requirements: Templates and timing for regular inventory and financial reporting

6. Schedule 6 - Approved Locations: List of authorized locations for storing financed inventory

7. Appendix A - Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

8. Appendix B - Insurance Requirements: Detailed insurance specifications and requirements

9. Appendix C - Compliance Certificates: Templates for periodic compliance certification

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions



















































Clauses



































Relevant Industries

Automotive

Electronics and Appliances

Heavy Equipment

Machinery

Recreational Vehicles

Agricultural Equipment

Marine Equipment

Furniture and Home Furnishings

Consumer Goods

Industrial Equipment

Construction Equipment

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Operations

Credit Administration

Commercial

Business Development

Internal Audit

Security Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Manager

Risk Manager

Legal Counsel

Compliance Officer

Commercial Director

Operations Manager

Inventory Manager

Floor Plan Administrator

Security Documentation Officer

Relationship Manager

Business Development Manager

Internal Auditor

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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