Commercial Payment Plan Agreement (Australia)
This Commercial Payment Plan Agreement (the "Agreement") is entered into on [Agreement Date] between:
CREDITOR:
[Creditor Name] (ABN: [Creditor ABN]), of [Creditor Address], [Creditor Suburb] [Creditor State] [Creditor Postcode] (the "Creditor"); and
DEBTOR:
[Debtor Name] (ABN: [Debtor ABN]), of [Debtor Address], [Debtor Suburb] [Debtor State] [Debtor Postcode] (the "Debtor").
The Creditor and Debtor are referred to collectively as the "Parties" and individually as a "Party".
1. ACKNOWLEDGEMENT OF DEBT
1.1 The Debtor acknowledges and agrees that, as at the date of this Agreement, the Debtor owes to the Creditor the following outstanding debt (the "Debt"):
Description: [Debt Description]
Principal amount: AUD $[Outstanding Amount]
Accrued interest and charges: AUD $[Interest Accrued]
Total Debt: AUD $[Total Debt]
1.2 The Debtor acknowledges that the Debt is due and payable to the Creditor and agrees to repay the Debt in accordance with the payment plan set out in this Agreement. This acknowledgement is not a waiver by the Creditor of any rights, including the right to pursue the full Debt if the Debtor defaults.
2. PAYMENT PLAN
2.1 Subject to the Debtor complying with all the terms of this Agreement, the Creditor agrees to accept repayment of the Debt in [Number of Instalments] instalments of AUD $[Instalment Amount] each (or such other amount as may be required for the final instalment to discharge the Debt in full), payable [Instalment Frequency].
2.2 The first instalment is due on [First Payment Date]. Subsequent instalments are due [Instalment Frequency] thereafter. The final instalment is due on [Final Payment Date], by which date the entire Debt (plus any accrued interest under clause 3, if applicable) must be repaid in full.
2.3 All payments must be made by [Payment Method]. The Creditor's payment details will be confirmed in writing to the Debtor. Payments received after 5:00 pm AEST on any instalment due date are treated as received on the next business day.
2.4 All payments must be made in Australian dollars (AUD) and free of any set-off, deduction, or withholding, unless required by law.
2.5 During the term of this Agreement, the Creditor will not commence or continue legal proceedings to recover the Debt, provided the Debtor complies with all payment obligations under this Agreement. This clause does not affect the Creditor's rights on Default.
3. DEFAULT
3.1 The Debtor will be in default under this Agreement ("Default") if: (a) the Debtor fails to pay any instalment in full within [Default Grace Period] of the due date; (b) the Debtor makes a representation or warranty in this Agreement that proves materially false or misleading; (c) the Debtor becomes insolvent, is placed into administration, receivership, or liquidation, makes a composition or arrangement with creditors, or ceases to carry on business; or (d) the Debtor commits a material breach of any other term of this Agreement.
3.2 Upon Default, the Creditor may, by written notice to the Debtor: (a) declare the entire remaining Debt (plus accrued interest and all other amounts payable under this Agreement) immediately due and payable; (b) withdraw the payment plan and demand immediate payment of all outstanding amounts; and (c) commence any legal, debt recovery, or enforcement proceedings the Creditor considers appropriate, including proceedings in a court of competent jurisdiction, engagement of a debt collection agency, or lodging a caveat or taking other security enforcement steps.
3.3 The Creditor's right to charge interest at the default rate of 15% per annum on any amount outstanding after Default (in addition to the contractual interest rate under clause 3) is preserved.
3.4 The Debtor shall pay all reasonable costs and expenses incurred by the Creditor in enforcing this Agreement or recovering the Debt on Default, including solicitor's fees on a solicitor-client basis and debt collection agency commissions.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Debtor represents and warrants to the Creditor that: (a) it has full legal capacity and authority to enter into this Agreement; (b) this Agreement constitutes a legal, valid, and binding obligation of the Debtor; (c) there is no pending or threatened litigation, arbitration, or proceeding that may materially adversely affect the Debtor's ability to perform its obligations; (d) it has not concealed any assets or disposed of any assets in a manner that would render it unable to perform its obligations; and (e) the information provided in relation to the Debt is true and accurate in all material respects.
5. GENERAL PROVISIONS
5.1 Governing Law: This Agreement is governed by the laws of [Governing State], Australia. Each Party irrevocably submits to the exclusive jurisdiction of the courts of [Governing State].
5.2 Entire Agreement: This Agreement constitutes the entire agreement between the Parties relating to the repayment of the Debt and supersedes all prior negotiations, representations, and agreements.
5.3 Amendments: No amendment to this Agreement is valid unless made in writing and signed by authorised representatives of both Parties.
5.4 No Waiver: Failure or delay by the Creditor to exercise any right under this Agreement does not constitute a waiver of that right.
5.5 Severability: If any provision of this Agreement is invalid or unenforceable, the remaining provisions continue in full force.
5.6 Notices: Notices under this Agreement must be in writing and delivered by email, post, or hand delivery to the addresses of the Parties set out above.
5.7 National Credit Code: The Parties confirm that this Agreement is entered into for commercial purposes and that the National Credit Code (Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth)) does not apply to this Agreement.
EXECUTED as an agreement on [Agreement Date].
CREDITOR: [Creditor Name]
ABN: [Creditor ABN]
Signed: ________________________ Date: _______________
Name: _____________________________ Position: ___________
DEBTOR: [Debtor Name]
ABN: [Debtor ABN]
Signed: ________________________ Date: _______________
Name: _____________________________ Position: ___________
IMPORTANT NOTICE TO THE DEBTOR: You should obtain independent legal and financial advice before signing this Agreement. If you are an individual or a small business and you believe you are being treated unfairly, you may wish to contact the Australian Financial Complaints Authority (AFCA) or the relevant state small business commissioner.
Creditor
________________
Signature
Date: ________________
Debtor
________________
Signature
Date: ________________
What Is a Commercial Payment Plan Agreement (Australia)?
A Commercial Payment Plan Agreement in Australia records the amount advanced, the repayment schedule, interest, and the lender's remedies on default between lender and borrower under the National Consumer Credit Protection Act 2009 (Cth).
A Commercial Payment Plan Agreement typically includes the debtor's formal acknowledgement of the outstanding debt, the instalment schedule (amount, frequency, and dates), interest provisions, default events and consequences (including acceleration of the full balance), enforcement rights, and — where the debtor is a company — a personal guarantee from the directors or owners.
Commercial payment plans in Australia are not subject to the National Credit Code (NCC) under the National Consumer Credit Protection Act 2009 (Cth), which applies only to consumer credit arrangements entered into for personal, domestic, or household purposes. This gives the parties greater freedom to negotiate the terms, including interest rates and default remedies, without the NCC's consumer protection requirements.
However, the Australian Consumer Law (ACL) still applies to the extent that unconscionable conduct in commercial transactions is prohibited under section 21 of the ACL. A creditor who uses their superior bargaining position to impose grossly unfair terms on a debtor may be exposed to ACL unconscionability claims.
The Australia Commercial Payment Plan Agreement (Australia) template is designed for B2B commercial debt restructuring in all Australian states and territories and includes all the elements needed for a legally sound and commercially effective payment plan agreement.
The legal framework governing the Commercial Payment Plan Agreement (Australia) in Australia draws on several key statutes and regulatory bodies. Under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 1989, ASIC regulates financial products and services. The National Consumer Credit Protection Act 2009 (Cth) governs consumer lending. The Australian Taxation Office (ATO) applies stamp duty through state revenue offices. The Australian Financial Complaints Authority (AFCA) resolves consumer financial disputes. The Reserve Bank of Australia (RBA) sets monetary policy affecting interest rate obligations in financial agreements. Parties executing a Commercial Payment Plan Agreement (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Consumer Credit Protection Act 2009 (Cth) sets the foundational requirements.
When Do You Need a Commercial Payment Plan Agreement (Australia)?
A Commercial Payment Plan Agreement is appropriate in the following circumstances.
Unpaid trade invoices: A supplier has delivered goods or services to a business customer but has not been paid. Rather than commencing debt recovery proceedings immediately, the supplier agrees to accept structured repayments over a period of time. A formal payment plan documents this arrangement and protects the supplier's rights if the debtor defaults.
Business loan restructuring: A lender has advanced funds to a business borrower and the borrower is struggling to repay. A payment plan documents the restructured repayment terms and preserves the lender's right to enforce the full balance on default.
Commercial damages: One business owes damages to another following a breach of contract. Rather than litigating the amount and enforcement of those damages, the parties agree to a structured payment plan.
Post-judgment debt collection: After obtaining a court judgment for a commercial debt, a creditor may prefer to accept structured repayments rather than pursue writ enforcement (which can be costly and uncertain) — particularly where the debtor has some capacity to pay over time.
Business-to-business credit: Any B2B scenario where the parties want to document the terms of deferred payment for a commercial obligation, including renovation costs, consulting fees, and distribution arrangements.
A formal Commercial Payment Plan Agreement is preferable to an informal email exchange because it: acknowledges the debt in writing; sets a fixed schedule with default consequences; preserves the creditor's right to interest and enforcement costs; allows for a personal guarantee from company directors; and creates an evidentiary record if litigation is ultimately required.
Parties in Australia should prepare a Commercial Payment Plan Agreement (Australia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 1989, ASIC regulates financial products and services. The National Consumer Credit Protection Act 2009 (Cth) governs consumer lending. The Australian Taxation Office (ATO) applies stamp duty through state revenue offices. The Australian Financial Complaints Authority (AFCA) resolves consumer financial disputes. The Reserve Bank of Australia (RBA) sets monetary policy affecting interest rate obligations in financial agreements. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Commercial Payment Plan Agreement (Australia)
A thorough Australian Commercial Payment Plan Agreement should include the following key elements.
Debt acknowledgement: The debtor's written acknowledgement that the debt exists, that it is due and payable, and that the amount is correct as at the date of the agreement. This acknowledgement prevents the debtor from later disputing the existence or amount of the debt, and may also restart the limitation period for debt recovery under the relevant Limitation Act in the debtor's state.
Instalment schedule: The agreement should set out the amount of each instalment, the frequency (weekly, fortnightly, monthly, or quarterly), the due date of the first instalment, the number of instalments, and the date of the final instalment by which the entire debt must be repaid. The instalment amounts should be achievable for the debtor while confirming the creditor is repaid within a commercially acceptable timeframe.
Interest provisions: In a commercial context, it is common and lawful to charge interest on the outstanding balance during the payment plan period. The interest rate, calculation method (daily or monthly), and compounding frequency should be clearly stated. Some agreements include an incentive clause waiving interest if the debtor makes all payments on time.
Default and acceleration: The agreement should define what constitutes a default — including missed payments, insolvency events, and misrepresentation — and specify the consequences, including acceleration of the full remaining balance, withdrawal of any interest concessions, and the creditor's right to enforce the debt by legal proceedings.
Personal guarantee: Where the debtor is a company, the creditor should consider requiring a personal guarantee from the company's director(s) or owner(s). This provides the creditor with a direct claim against the individual if the company defaults and cannot pay.
Governing law and enforcement costs: The agreement should specify the governing state, confirm that enforcement costs (including solicitor's fees) are payable by the defaulting debtor, and confirm that the National Credit Code does not apply.
Additional compliance elements for a Commercial Payment Plan Agreement (Australia) used in Australia include: Under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 1989, ASIC regulates financial products and services. The National Consumer Credit Protection Act 2009 (Cth) governs consumer lending. The Australian Taxation Office (ATO) applies stamp duty through state revenue offices. The Australian Financial Complaints Authority (AFCA) resolves consumer financial disputes. The Reserve Bank of Australia (RBA) sets monetary policy affecting interest rate obligations in financial agreements. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Commercial Payment Plan Agreement (Australia) (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/financial/debt/commercial-payment-plan-australia
"Commercial Payment Plan Agreement (Australia) (Australia)." Forms Legal, 2026, https://forms-legal.com/australia/financial/debt/commercial-payment-plan-australia.
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author = {{Forms Legal}},
title = {Commercial Payment Plan Agreement (Australia) (Australia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/australia/financial/debt/commercial-payment-plan-australia}},
note = {Free legal document template. Based on National Consumer Credit Protection Act 2009 (Cth)}
}Also available for these jurisdictions:
Frequently Asked Questions
The National Credit Code (NCC), which forms Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) and is administered by ASIC, applies to credit contracts where credit is provided to an individual (or strata corporation) wholly or predominantly for personal, domestic, or household purposes. It does not apply to credit provided wholly or predominantly for business or investment purposes. A commercial payment plan between two businesses for the restructuring of a commercial debt — such as unpaid trade invoices, a business loan, or damages arising from a commercial contract — is generally not subject to the NCC. This means the parties have greater freedom to negotiate interest rates, default provisions, and enforcement rights without the NCC's consumer protections applying. However, if a sole trader or individual guarantor is involved, the NCC may apply to personal guarantees, and legal advice should be obtained.
Default occurs when the debtor fails to comply with a material obligation under the payment plan — most commonly, failing to pay an instalment on time. A well-drafted commercial payment plan should define exactly what constitutes default and include: a short grace period (typically 3–7 business days) before default is formally declared; a list of other default events such as insolvency, appointment of an administrator or liquidator, making a composition with creditors, or misrepresentation; and the consequences of default, including acceleration of the debt (the full remaining balance becoming immediately payable), loss of any interest waiver, commencement of legal proceedings, and the right to claim enforcement costs. Australian courts will enforce acceleration clauses in commercial contracts as long as they are clearly drafted and not unconscionable under section 20 of the Australian Consumer Law.
Yes. In a commercial (B2B) context, parties are free to agree on an interest rate for overdue amounts. There is no statutory cap on commercial interest rates in Australia (unlike consumer credit, which is regulated by the NCC). The agreed interest rate should be set out clearly in the payment plan agreement and expressed as a percentage per annum. A reasonable commercial default interest rate is typically between 8% and 15% per annum. Courts may decline to enforce an interest rate clause that is found to be a penalty (i.e. not a genuine pre-estimate of loss but rather a punishment for breach), although Australian courts apply the penalty doctrine narrowly in commercial contracts following the High Court's decision in Andrews v Australia and New Zealand Banking Group Ltd (2012). Interest on commercial debts should be charged on overdue amounts from the due date of payment and calculated on a daily basis.
Yes, a personal guarantee given by a director or business owner as part of a commercial payment plan is enforceable in Australia, subject to important limitations. The guarantee must be in writing and signed by the guarantor. Courts will scrutinise whether the guarantor had independent legal advice before signing, whether the creditor engaged in any unconscionable conduct in obtaining the guarantee (section 20, ACL), and whether the guarantee terms are clear and unambiguous. The guarantee must specify whether it is unlimited (for the entire debt) or capped at a specific amount. Guarantees that are obtained by undue influence, misrepresentation, or without disclosure of material facts may be voidable. Creditors should requires the guarantor signs the document separately and, ideally, obtains independent legal and financial advice before doing so. In practice, a director's guarantee significantly improves the creditor's prospects of recovery if the company defaults.
A Commercial Payment Plan Agreement (Australia) does not legally require a lawyer in Australia, and individuals and businesses may draft and execute the document independently. The National Consumer Credit Protection Act 2009 (Cth) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Australia lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Federal Court of Australia has jurisdiction over disputes arising from this type of document, and Australian Securities and Investments Commission (ASIC) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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