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Vendor Finance Agreement for Philippines

Vendor Finance Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that establishes the terms and conditions under which a vendor provides financing to a customer for the purchase of goods or equipment. The agreement encompasses key financial terms, security arrangements, and compliance requirements under Philippine regulations, including the Civil Code, Truth in Lending Act, and relevant banking regulations. It details payment schedules, interest calculations, security interests, default provisions, and remedies while ensuring compliance with local financial regulations and consumer protection laws.

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What is a Vendor Finance Agreement?

The Vendor Finance Agreement is essential for businesses in the Philippines seeking to provide or obtain financing for significant equipment or goods purchases. This agreement type is commonly used when vendors offer direct financing to their customers as an alternative to traditional bank financing, particularly in sectors requiring substantial capital investment. The document, governed by Philippine law, must comply with local financial regulations, including the Truth in Lending Act and relevant provisions of the Civil Code of the Philippines. It typically includes detailed terms for the financing arrangement, security interests, payment schedules, and default provisions. The agreement is particularly relevant in scenarios where vendors aim to facilitate sales by offering flexible financing options while protecting their interests through appropriate security arrangements and regulatory compliance.

What sections should be included in a Vendor Finance Agreement?

1. Parties: Identification of the vendor (finance provider) and the customer (borrower), including complete legal names and addresses

2. Background: Context of the financing arrangement, relationship between parties, and purpose of the agreement

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

4. Facility and Purpose: Details of the financing facility being provided, including amount, purpose, and basic terms

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

6. Drawdown and Payment Terms: Procedures for accessing the financing and terms of repayment

7. Interest and Fees: Interest rate calculations, applicable fees, and payment schedules

8. Security and Collateral: Description of security interests and collateral arrangements

9. Representations and Warranties: Statements of fact and assurances given by each party

10. Covenants: Ongoing obligations of the parties during the term of the agreement

11. Events of Default: Circumstances constituting default and consequences

12. Remedies: Rights and remedies available to parties in case of default or breach

13. Term and Termination: Duration of the agreement and circumstances for early termination

14. General Provisions: Standard legal provisions including notices, amendments, governing law, etc.

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

1. Guarantees: Required when third-party guarantees are part of the security structure

2. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required for financed assets

3. Foreign Exchange Provisions: Needed when financing involves multiple currencies or international payments

4. Tax Provisions: Detailed tax arrangements when complex tax implications exist

5. Assignment and Transferability: Required when either party needs the right to assign or transfer their rights

6. Additional Security Arrangements: When multiple or complex security arrangements are required

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

8. Force Majeure: Detailed provisions for handling unforeseen circumstances affecting performance

What schedules should be included in a Vendor Finance Agreement?

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment amounts, dates, and calculation methods

2. Schedule 2 - Asset Description: Detailed description of financed assets or equipment

3. Schedule 3 - Interest Rate Calculations: Detailed methodology for calculating interest rates and adjustments

4. Schedule 4 - Form of Drawdown Notice: Template for requesting disbursements under the facility

5. Schedule 5 - Security Documents: Forms of security documents and filing requirements

6. Schedule 6 - Conditions Precedent Documents: List of required documents and conditions to be satisfied

7. Appendix A - Financial Covenants: Detailed financial ratios and requirements to be maintained

8. Appendix B - Compliance Certificate: Template 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

Philippines

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions


















































Clauses









































Relevant Industries

Manufacturing

Technology & Equipment

Industrial Equipment

Construction

Healthcare Equipment

Agricultural Equipment

Transportation & Logistics

Telecommunications

Energy & Utilities

Infrastructure

Relevant Teams

Legal

Finance

Sales

Procurement

Treasury

Risk Management

Compliance

Business Development

Operations

Credit Management

Commercial Operations

Relevant Roles

Chief Financial Officer

Finance Director

Commercial Director

Legal Counsel

Credit Manager

Sales Director

Procurement Manager

Treasury Manager

Risk Manager

Compliance Officer

Business Development Manager

Contract Manager

Financial Controller

Account Executive

Operations 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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