Pre-Agreement Proposal – Financial Lease Agreement

PRE-AGREEMENT PROPOSAL

For a Financial Lease Agreement

(in terms of the NCA)

Summary A lender that finances goods (such as computers, vehicles, equipment, office furniture etc) for people on a financial lease basis may use a Pre-Agreement Proposal together with their own financial lease agreement conditions. This Pre-Proposal Quotation has been drafted with the National Credit Act in mind.

Why would I need a Pre-Agreement Quotation? The National Credit Act requires a lender to provide a borrower with a pre-agreement proposal before the credit agreement is entered into. This proposal is effectively a quotation that sets out the amount of the credit facility and the terms of the borrower’s repayment. A Pre-Agreement Quotation provides for the loan of goods that is repaid in rentals over a specific period, with regular payment obligations.

This document does not include the Financial Lease Agreement. We do offer a Financial Lease Agreement with the Pre-Agreement Proposal included if required.

What does the proposal say? This template Pre-Agreement quotation covers the following issues: Description of goods; Finance details; Finance term; Rentals.

How long is the document? The template can be printed onto three pages.

What do you need to do to use the Pre-Agreement Proposal?

• Read the template document to ensure that it suits your requirements. Make changes as required.
• Complete the details as they pertain to the borrower.
• Ensure that the document is signed by both the financier and the borrower.
• Ensure that you also have the associated Financial Lease Agreement.

Before signing this document, the financier is advised to conduct a comprehensive financial and credit check on the borrower, and get the borrower to complete a separate application form for a credit facility.

This Pre-Agreement Quotation is intended for use in cases where the National Credit Act applies. While it has been drafted in accordance with our interpretation of the legislation, we recommend that you obtain independent advice before using any document required by the NCA. Agreements Online will not be liable for any damages you may suffer due to your non-compliance with any regulatory requirements.

Also known as: Pre-Agreement Quotation; Quotation/Proposal in terms of NCA

Also viewed: Instalment Sale Agreement

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