This document is a declaration of business purpose clause. It is designed to be inserted into a loan agreement. The defined terms in this clause have the same meaning as those in the precedent called “Basic loan agreement”.
Consumer credit legislation
Where a lender is defined a credit provider under the National Consumer Credit Act 2009 (Cth) (Act) and the loan to be provided to the borrower is for the purposes of business or investment, the credit provider usually requires the borrower to sign a business purpose declaration pointing out that they will not have the protections of the National Credit Code (schedule 1 to the Act) for that specific loan.
Under section 13(5) of the National Credit Code and regulation 68 of the National Consumer Credit Protection Regulations 2010 (Cth), this declaration will be considered proof that the National Credit Code does not apply unless the credit provider or their agents knew, or had reason to believe, that the credit was for personal purposes.
- Basic loan agreement
- Guarantee of payment of loan
- General security deed
- Amendment and restatement agreement
- Deed of priority
- Forbearance of debt agreement
- Deed of assignment of debt
- Real property mortgage
- Loan agreement checklist
This document has been authored for Lexis Nexis by Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editors Geoff Geha, Partner, Clayton Utz and Karen Lee, Principal and Consultant, Legal Know-How.