Loaner Agreements for Your Technology

Loaner Agreements allow potential customers a free period to install and use the vendor’s hardware products at the Customer’s site, or if they used a host provider, at that host provider’s data center. It’s sort of like a trial software license, however this Loaner concept applies to the loan of a tangible asset. In a loaner agree you must be concerned 1) that the customer actually uses the asset (you don’t want the loaner to sit in the customer’s data center and simply ignored (this happened more often than you might realize). The vendor needs to make plans to provide the customer with implementation assistance and orientation training on the proper use of the loaner equipment at the customer’s site; it would probably be best for the vendor to think of these as unpaid sales expenses. Simply stated if the vendor is not prepared to help the customer with these sorts of necessary service both parties are likely wasting their time.

One big recurring item with loaner agreements is the return of the loaned asset, often large customers simply do not return the loaner product in a timely fashion and the vendor is left in an awkward position. The vendor files a UCC 1 when they execute the Loaner agreement to ensure that creditor’s have formal knowledge that the loaner asset belong to the vendor (much like an equipment leasing company does).The vendor does not have this issue in a trial software agreement where the software can simply time-out and stop works; or in a vendor hosted POV type agreement, where the vendor retains control over the Service availability. In a hardware context, particularly with large existing customer the return of loaner equipment can become a major concern,

With a heavy emphasis on shifting processing to the cloud, loaner agreements are not as prominent as they were a few years ago. They can however still represent an important cog in the tech infrastructure sales and purchase process.

Create or Secure Your Loaner Agreement Now

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