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Loan Lease Agreement for the United States

Loan Lease Agreement Template for United States

A Loan Lease Agreement is a hybrid financial instrument used in the United States that combines elements of both a loan and a lease into a single agreement. It enables the borrower to obtain financing while simultaneously leasing an asset, typically used for equipment, vehicles, or other capital assets. The agreement is governed by both federal regulations including the Truth in Lending Act and state-specific lending laws, providing structure for payment terms, interest rates, asset usage rights, and eventual ownership options.

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What is a Loan Lease Agreement?

The Loan Lease Agreement serves as a comprehensive financial instrument particularly suited for businesses and individuals seeking to finance and lease assets simultaneously. This contract type provides flexibility in structuring financing while maintaining security interests in the leased asset. Under U.S. jurisdiction, it incorporates elements of both secured lending and leasing, subject to federal regulations such as the Truth in Lending Act and state-specific requirements. The agreement typically includes detailed terms for both the loan component (interest rates, payment schedules) and the lease aspect (usage rights, maintenance obligations), making it particularly valuable for equipment financing and capital asset acquisition.

What sections should be included in a Loan Lease Agreement?

1. Parties: Identification and details of the lender and borrower/lessee

2. Background: Context and purpose of the loan lease agreement

3. Definitions: Key terms used throughout the agreement

4. Loan Terms: Principal amount, interest rate, payment schedule, and term

5. Lease Terms: Description of leased property, lease period, and payments

6. Security Interest: Details of collateral and security arrangements

7. Representations and Warranties: Statements of fact by both parties

8. Events of Default: Circumstances constituting default and remedies

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

1. Insurance Requirements: Required insurance coverage for leased property - include when valuable equipment or property is involved

2. Assignment Rights: Rights to assign or transfer the agreement - include when transfer rights are important to either party

3. Purchase Option: Terms for purchasing leased property - include when offering option to purchase at end of lease

What schedules should be included in a Loan Lease Agreement?

1. Payment Schedule: Detailed breakdown of payment amounts and due dates

2. Property Description: Detailed description of leased property or equipment

3. Maintenance Schedule: Required maintenance procedures and schedules

4. Insurance Requirements: Detailed insurance specifications and requirements

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

United States

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Clauses






























Industries

Truth in Lending Act (TILA): Federal law requiring disclosure of credit terms and costs, including regulation of credit terms advertising

Consumer Leasing Act: Federal legislation governing disclosure of lease terms and costs, providing consumer protection in personal property leases

Equal Credit Opportunity Act (ECOA): Federal law prohibiting discrimination in credit transactions and ensuring fair lending practices

Fair Credit Reporting Act (FCRA): Federal regulation governing the use and protection of consumer credit information

State Usury Laws: State-specific regulations controlling maximum interest rates and late fee restrictions

State Consumer Protection Laws: Varying state-level regulations providing additional consumer protections and disclosure requirements

State-Specific Lending Regulations: State-level requirements for lending licenses and specific disclosures

UCC Article 2A: Uniform Commercial Code article specifically governing leases

UCC Article 9: Uniform Commercial Code article covering secured transactions

Securities Laws: Federal and state regulations governing securities transactions, if applicable to the loan lease agreement

Bankruptcy Laws: Federal and state regulations affecting creditor rights and debtor obligations in bankruptcy scenarios

Property Laws: State-specific laws governing property rights and transactions

Contract Law Principles: General principles of contract formation, enforcement, and remedies under common law

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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