Equipment loan agreement template for Word (free download)
Equipment loan agreement template for Word (free download)
Tools and equipment move constantly in a warehouse: an angle grinder, a drill, a laptop, a two-way radio, a barcode scanner. Most of the time they leave with a note in a notebook or a text message, and most of the time they come back. The problem shows up the day one does not come back, comes back dented, or turns up with a fault nobody reported. At that point the argument starts: who had it, what condition was it in, and who answers for it.
An equipment loan agreement settles that argument because it puts in writing what is normally agreed by word of mouth: the company hands over equipment for free use, and the other party undertakes to look after it, to use it only for the agreed tasks and to return it. It is not a sale and it is not a lease either: nobody pays for the use, and the equipment still belongs to whoever handed it over.
This equipment loan agreement template for Word comes with the numbered blocks already laid out — parties, equipment table, terms of the loan, term and return, liability and signatures — plus the company letterhead, the copy line and the two closing notices. All you have to do is replace the company and borrower details, record the identification of each item and fill in the bracketed fields.
⬇ Download equipment loan agreement (.docx)
One point is worth settling before you start: this document does not cover everything that leaves the warehouse. It covers equipment that is lent out and has to come back. If the equipment is sold, the right paperwork is something else; if a fee is charged for its use, so is that. Placing the case correctly saves arguments later and stops one template from being stretched over situations it was never written for.
What this document is, and what it is not
A loan of this kind is the free use of an item with an obligation to return it. In Spanish-speaking practice it is called a comodato, and this file keeps that vocabulary alongside the English one: the lender is the comodante and the borrower is the comodatario. The point of naming it properly is that the name carries the two conditions that hold the whole agreement together: the use is free of charge, and the item must come back.
The difference from a lease is the price. In a lease somebody pays to use the equipment and a recurring charge sits behind the document; in a loan agreement there is no payment, so the document does not need to discuss rent or billing, only the estimated value of the equipment, which serves as a reference if the item is lost or damaged. The difference from a sale is ownership: in a loan the ownership does not change hands, the equipment stays on the fixed asset register of the company that handed it over, and that is why a return record is signed at the end.
It is also worth not confusing it with other templates in the same set. An inventory handover record transfers responsibility for a whole warehouse between two people; a job handover record is signed when somebody leaves a post and returns keys, access and equipment; a PPE issue record covers safety items and uniforms for personal use. An equipment loan agreement is more specific: one piece of equipment, with a specific identification, that goes out and must come back by a date.
What it is used for
In day-to-day operations the agreement does several jobs at once:
- Formalising equipment leaving and re-entering the warehouse, so nothing depends on the memory of whoever handed it over.
- Making clear who answers for loss, damage or misuse, and which evidence is used to verify the condition of the item.
- Covering tools handed to contractors or to staff from other companies working inside the operation.
- Setting the return date and the authorised place of use, so it is known when and where each item has to come back.
- Feeding the fixed asset register: every issue carries a make, serial number or asset tag and the condition on delivery.
- Acting as the supporting document when the return does not happen and the case moves to whoever handles it.
What the template includes
The file carries the letterhead and six numbered sections. This is the actual structure of the document and what goes in each part:
| Section | What is written there |
|---|---|
| Letterhead and date | Company name, company ID, address, city, phone, email and website; below that, the city and the date of signature. |
| Title | Equipment loan agreement, centred and in capitals, on the company letterhead. |
| 1. Parties | Lender, with its identification; borrower, with its identification; the borrower address and phone number. |
| 2. Equipment | A paragraph defining the loan as free use with an obligation to return, and a four-column table: equipment, make or identification, condition on delivery and estimated value. |
| 3. Terms of the loan | Four undertakings already written out: use the equipment only for the agreed tasks; keep it at the stated location and not move it without authorisation; not lend it, sublet it or hand it to third parties; carry out basic maintenance and report any fault. |
| 4. Term and return | Delivery date and return date, place of use, and the paragraph requiring the equipment to come back in the same condition as received, apart from normal wear, with the corresponding return record signed. |
| 5. Liability | A paragraph on loss, damage or misuse of the equipment, with three bracketed options: deduction of the estimated value, replacement of the item, or payment of the repair, after the condition and the evidence are checked. |
| 6. Signatures | Space for each party to sign, with name and identification, plus the note that it is signed in duplicate. |
| Copy and notices | Copy line for fixed assets and for the borrower file, plus the notice that the template is general guidance and the recommendation to record each item identification and condition. |
The table in section 2 matters more than any other part of the document, and it is the part most often rushed. One row per item, with its make or identification, is what makes comparison possible later: if the delivery note says a drill with serial number 4821 and scratches on the housing, the return takes two minutes to check. If it only says drill, there is nothing to compare.
How to use it, step by step
- Identify the equipment before writing anything. Note the name, the make, the serial number or asset tag, and a description of the condition it leaves in: new, good, scratched, missing a part. Without that detail the return cannot be verified.
- Replace the letterhead and the footer. The company name, company ID, address, city, phone, email and website fields must carry the real details, and so must the footer, because that is what gets printed on every page of the document.
- Complete section 1 with both parties. Write who hands over and who receives, with full name and identification, and add the borrower address and phone number: those are the details that let you track the borrower down when the return does not happen.
- Fill in the table in section 2. One row per item, with its make or identification, the condition on delivery and the estimated value. If the estimated value is left blank, the liability section loses its reference and the argument moves to the moment of the damage.
- Review the list of undertakings and add the ones your operation needs. The four in the file are the base; if the equipment requires calibration, prior training or use with protective gear, write it in the same block.
- Set the dates, the place of use and what happens if the return is late. Write the delivery date and the return date, the site where the equipment may be used and, if your operation needs it, the extra period allowed and the consequences of a delay. Bracketed fields are filled in before signing, not after.
- Choose one single option in section 5. The file offers deduction of the estimated value, replacement of the item or payment of the repair; keep the one your company actually applies and delete the others, so the three alternatives are not left open.
- Sign two copies and file them. One copy goes to fixed assets, one to the borrower file; when the equipment comes back, sign the return record and keep the photographs of the condition it was received in.
Common mistakes to check before signing
- Handing over equipment without identifying it. Writing drill verifies nothing; writing drill with make, serial number and case does verify that everything came back.
- Describing the condition in one word. Good or fair do not say whether there were dents, scratches or missing parts; write down what you see at the moment of delivery.
- Leaving the estimated value blank. It is the figure that makes a conversation about replacement or deduction possible before the problem happens, rather than after.
- Not defining the place of use or who authorises a move. If the equipment may travel between sites, write it down; if it may not, the duty to keep it at the stated location has nothing behind it.
- Signing with the three liability options unmarked. Keep one alternative only, and check that it matches what the company really does when equipment is damaged.
- Not signing the return. The loan is closed with a return record; without that sheet the equipment still shows as issued and the case cannot be closed.
When it is worth moving to a system
With a few items and occasional movements, the Word template is enough: you fill it in, sign it and file it. That changes when the warehouse lends many tools every day, when equipment is spread across several sites, or when several people hand items over at the same time. That is when paper starts to fail, not because the template is wrong but because nobody can review the folder any more: it is no longer clear who holds each item, which ones are overdue, or how many went missing during the year.
That scenario is what Kardex Tauro is for: an inventory system built for warehouses and small companies, where each item carries its code, its responsible person and its history of issues and returns, and lending no longer depends on somebody remembering the notebook. The loan agreement does not disappear: it stays as the signed record and as the backup when a lost item has to be claimed, but the daily control lives in the system rather than in the folder.
The decision is practical and does not take long to make. If the warehouse team admits it has already lost track of what is out on loan, it is time for a system. Kardex Tauro lets you make that move without throwing away what already works: the Word templates stay as documentary annexes and the system handles follow-up, due dates and the alerts that arrive before the item is lost.
Important notice: general template, not legal advice
This agreement is general guidance for internal use and is not legal advice. Before signing it, have it reviewed by your company adviser and adapted to your operation and your country: the scope of liability, the duties of care and the handling of lost or damaged equipment vary with the activity and with the local rules that apply to you. The Word file already carries this notice at the end, and it is worth keeping it when the template is customised.
