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Bridge Loan Agreement for Australia

Bridge Loan Agreement Template for Australia

An Australian-law governed Bridge Loan Agreement is a sophisticated financial instrument that provides temporary financing to bridge the gap between immediate capital needs and longer-term funding solutions. This agreement details the terms and conditions of a short-term loan facility, typically secured against assets, with specific provisions for interest rates, repayment terms, and security arrangements. The document incorporates Australian regulatory requirements, including those under the National Consumer Credit Protection Act and the Personal Property Securities Act, while addressing specific state-level requirements where applicable. It includes comprehensive provisions for drawdown conditions, covenants, events of default, and mandatory prepayment scenarios.

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What is a Bridge Loan Agreement?

The Bridge Loan Agreement is a critical financing document used when entities require interim funding before securing long-term financing or completing a specific transaction. This document type is particularly relevant in the Australian market where bridge financing is commonly used in property development, corporate acquisitions, and business expansion scenarios. The agreement outlines the temporary nature of the facility, typically ranging from a few months to two years, and includes specific provisions for security, interest calculations, and repayment mechanisms. It must comply with Australian federal and state legislation, including financial services regulations and consumer protection laws. The Bridge Loan Agreement is structured to protect the lender's interests while providing the borrower with necessary flexibility for their interim financing needs.

What sections should be included in a Bridge Loan Agreement?

1. Parties: Identifies and defines the Lender and Borrower with full legal names and details

2. Background: Explains the context of the bridge loan, including its purpose and any relevant circumstances

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. The Facility: Details of the loan amount, purpose, and basic terms

5. Conditions Precedent: Conditions that must be satisfied before the loan becomes available

6. Drawdown: Procedures and requirements for accessing the loan funds

7. Interest: Interest rate, calculation method, and payment terms

8. Repayment: Terms for repayment of the principal amount and exit strategy

9. Security: Details of security arrangements and assets securing the loan

10. Representations and Warranties: Statements of fact and assurances given by the Borrower

11. Undertakings: Ongoing obligations of the Borrower during the loan term

12. Events of Default: Circumstances constituting default and consequences

13. Costs and Expenses: Allocation of costs, fees, and expenses related to the loan

14. General Provisions: Standard contractual provisions including notices, amendments, and governing law

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

1. Guarantees: Required when there are personal or corporate guarantors for the loan

2. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

3. Property Covenants: Specific provisions relating to property maintenance and management when real estate is involved

4. Special Purpose Vehicle Requirements: Additional provisions when the borrower is a special purpose vehicle

5. Cross-Collateralization: Required when multiple properties or assets secure the loan

6. Hedging Requirements: Provisions for interest rate hedging if required for the facility

7. Intercreditor Provisions: Required when there are multiple lenders or existing security holders

8. Construction Provisions: Required when the bridge loan involves property development or construction

What schedules should be included in a Bridge Loan Agreement?

1. Schedule 1 - Loan Details: Key commercial terms including amount, interest rate, fees, and key dates

2. Schedule 2 - Conditions Precedent: Detailed list of required documents and conditions

3. Schedule 3 - Security Documents: List and details of all security documents

4. Schedule 4 - Drawdown Notice: Form of drawdown notice to be used by the Borrower

5. Schedule 5 - Repeating Representations: Detailed list of representations that are deemed to be repeated

6. Schedule 6 - Properties: Details of any properties serving as security

7. Appendix A - Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

8. Appendix B - Form of Compliance Certificate: Template for periodic compliance certification

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

tiktok˰

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions









































































Clauses





































Relevant Industries

Real Estate & Property Development

Construction

Infrastructure

Mining & Resources

Healthcare

Retail

Manufacturing

Technology

Agriculture

Hospitality & Tourism

Professional Services

Transport & Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Commercial

Property

Investment

Operations

Corporate Development

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Finance Manager

Credit Manager

Risk Manager

Commercial Director

Investment Manager

Property Developer

Project Manager

Compliance Officer

Banking Relationship Manager

Financial Controller

Real Estate Manager

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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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