← Commercial Finance Answers

New contracts & business growth

What happens if a contract is cancelled after equipment finance starts?

The finance obligation generally continues unless the agreement provides otherwise, even when the work supporting the purchase disappears.

The practical answer

The finance obligation generally continues unless the agreement provides otherwise, even when the work supporting the purchase disappears.

Before committing, check customer termination rights and whether the asset has alternative uses or customers. Compare a conservative sale value with expected settlement if disposal might be needed.

If cancellation occurs, contact the lender early and review the cash position. Do not assume returning the asset to the supplier or stopping work automatically ends the borrowing.

Important

Commercial finance is subject to status, lender approval and the specific asset and transaction. The right structure depends on the complete circumstances of the business.

What should I do next?

Have the asset details, supplier information and an outline of what the business needs ready. DCF can then discuss the requirement and identify which lenders may be suitable.

Read: Equipment finance for a new contract →