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Loan Agreement Contract for United Arab Emirates

Loan Agreement Contract Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions of a loan facility between a lender and borrower. The agreement complies with UAE Civil Code (Federal Law No. 5 of 1985) and relevant banking regulations, with optional provisions for Sharia compliance under Federal Law No. 6 of 1985. It details the loan amount, interest/profit rate, repayment terms, security arrangements, representations, warranties, covenants, and events of default. The document incorporates specific UAE legal requirements while following international banking practices, making it suitable for both domestic and cross-border lending transactions.

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Loan Agreement Contract

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What is a Loan Agreement Contract?

The Loan Agreement Contract is a fundamental financial instrument in the UAE banking sector, used to formalize lending arrangements between financial institutions and borrowers. It serves as the primary documentation for both conventional and Islamic financing structures, incorporating requirements from the UAE Civil Code, Commercial Transactions Law, and Central Bank regulations. The agreement is essential for various financing purposes, from corporate funding to project finance, and can be adapted for bilateral or syndicated lending. It includes comprehensive provisions for loan disbursement, repayment, security arrangements, and default scenarios, while ensuring compliance with UAE's interest rate regulations and, where applicable, Sharia principles. The document's structure accommodates the UAE's unique legal framework, which combines civil law principles with Islamic finance considerations.

What sections should be included in a Loan Agreement Contract?

1. Parties: Identification of lender(s) and borrower(s) with full legal names and addresses as per UAE requirements

2. Background: Recitals explaining the context of the loan and confirmation of borrower's authority to enter into the agreement

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including Arabic terms where relevant

4. Facility Details: Principal amount, purpose, currency, and type of facility

5. Interest and Fees: Interest rate calculation, payment periods, default interest, and applicable fees

6. Drawdown: Conditions precedent, drawdown mechanics, and notice requirements

7. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

8. Representations and Warranties: Standard and UAE-specific representations including corporate existence, capacity, and Sharia compliance if relevant

9. Borrower Covenants: Positive and negative covenants, financial covenants, and information obligations

10. Events of Default: Default triggers and consequences, including UAE-specific events

11. Security: Overview of security package and cross-reference to security documents

12. Governing Law and Jurisdiction: Choice of UAE law and jurisdiction provisions

13. Notices: Communication methods and contact details for formal notices

14. Execution: Signature blocks complying with UAE execution requirements

What sections are optional to include in a Loan Agreement Contract?

1. Islamic Finance Provisions: Required for Sharia-compliant facilities, replacing conventional interest provisions with profit rate and other Islamic structures

2. Syndication Provisions: Required for syndicated facilities, including facility agent role, voting rights, and sharing provisions

3. Currency Provisions: Required for multi-currency facilities, including conversion mechanisms and exchange rate provisions

4. Guarantee: Required when there are guarantors, including guarantee terms and guarantor covenants

5. Tax Provisions: Detailed tax provisions required for cross-border lending or when VAT considerations apply

6. Assignment and Transfer: Detailed provisions for transferability of the loan, required in syndicated or tradeable facilities

7. Force Majeure: Specific force majeure provisions beyond standard defaults, particularly relevant post-COVID

What schedules should be included in a Loan Agreement Contract?

1. Schedule 1 - Conditions Precedent: List of required documents and conditions to be satisfied before drawdown

2. Schedule 2 - Form of Drawdown Notice: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if term loan

4. Schedule 4 - Security Details: Comprehensive list and details of all security arrangements

5. Schedule 5 - Financial Covenants: Detailed financial covenant calculations and reporting requirements

6. Schedule 6 - Form of Compliance Certificate: Template for periodic compliance reporting

7. Schedule 7 - Permitted Security: List of security interests permitted to exist

8. Appendix A - Form of Transfer Certificate: Template for loan participation transfers if applicable

9. Appendix B - Processing Fees Schedule: Detailed breakdown of all applicable fees and charges

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions


























































Clauses











































Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Trading and Commerce

Healthcare

Education

Hospitality and Tourism

Technology and Telecommunications

Energy and Utilities

Transportation and Logistics

Professional Services

Retail

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Islamic Banking

Operations

Risk Management

Commercial

Business Development

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Treasury Manager

Corporate Banking Officer

Islamic Banking Specialist

loan Officer

Financial Controller

Commercial Director

Business Development Manager

Company Secretary

Risk Management Officer

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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