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Drawdown Loan Agreement for Australia

Drawdown Loan Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that establishes the terms and conditions under which a lender provides a borrower with a loan facility that can be drawn down in multiple tranches over time. The agreement details the mechanics of drawdowns, interest calculations, repayment terms, conditions precedent, representations and warranties, and events of default. It incorporates relevant requirements under Australian financial services legislation, including the National Consumer Credit Protection Act 2009 (Cth) where applicable, and typically includes provisions for security arrangements and financial covenants.

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Drawdown Loan Agreement

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What is a Drawdown Loan Agreement?

The Drawdown Loan Agreement is a fundamental financing document used in Australian commercial lending transactions where funds are to be advanced in multiple tranches rather than as a single lump sum. This type of agreement is particularly useful for projects requiring staged funding, such as construction projects, business expansion, or ongoing working capital needs. The document comprehensively addresses the rights and obligations of all parties, including detailed procedures for requesting and making drawdowns, conditions that must be met before each drawdown, interest calculations, repayment terms, and security arrangements. It ensures compliance with Australian banking and finance regulations while providing flexibility in funding arrangements. The agreement is typically customized based on the specific needs of the transaction, the nature of the borrower's business, and the lender's requirements.

What sections should be included in a Drawdown Loan Agreement?

1. Parties: Identifies and defines the Lender, Borrower, and any Guarantors

2. Background: Sets out the context of the loan facility and the parties' intention to enter into the agreement

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

4. The Facility: Details the nature, purpose, and total amount of the loan facility

5. Drawdown Mechanics: Specifies the process, conditions, and requirements for making drawdown requests

6. Interest and Fees: Details the interest rate, calculation method, payment periods, and applicable fees

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

8. Conditions Precedent: Lists conditions that must be satisfied before any drawdown can occur

9. Representations and Warranties: States the borrower's assertions about their legal and financial status

10. Undertakings: Sets out ongoing obligations of the borrower during the loan term

11. Events of Default: Defines circumstances that constitute default and the lender's resulting rights

12. General Provisions: Contains standard boilerplate clauses including notices, amendments, and governing law

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

1. Security: Required when the loan is secured against specific assets or guarantees

2. Guarantee and Indemnity: Included when there are third-party guarantors for the loan

3. Special Drawing Rights: Used when specific drawing conditions or restrictions apply to certain tranches

4. Financial Covenants: Included for corporate borrowers or when specific financial metrics must be maintained

5. Increased Costs and Market Disruption: Used in facilities with variable rates or international elements

6. Multi-currency Provisions: Required when drawings can be made in multiple currencies

7. Assignment and Transfer: Included when either party may need to transfer their rights or obligations

8. Tax Gross-up and Indemnities: Required when tax implications need specific addressing

What schedules should be included in a Drawdown Loan Agreement?

1. Facility Details: Contains specific terms of the facility including amounts, interest rates, and fees

2. Drawdown Request Form: Template form for making drawdown requests under the facility

3. Conditions Precedent Documents: Detailed list of required documents and conditions for initial and subsequent drawdowns

4. Repayment Schedule: Detailed breakdown of repayment dates and amounts if fixed schedule applies

5. Security Details: Description of any security assets and related terms if loan is secured

6. Compliance Certificate: Template for periodic confirmation of compliance with loan terms

7. Fee Schedule: Detailed breakdown of all applicable fees and charges

8. Permitted Security Interests: List of pre-approved security interests that may exist over borrower assets

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

Loan Agreement

Sector

Cost

Free to use
Relevant legal definitions



























































Clauses


































Relevant Industries

Banking and Financial Services

Real Estate and Property Development

Infrastructure and Construction

Manufacturing

Energy and Resources

Agriculture

Healthcare

Technology and Telecommunications

Retail and Consumer Goods

Transport and Logistics

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Commercial Lending

Risk Management

Operations

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Finance Manager

Credit Manager

Relationship Manager

Risk Manager

Compliance Officer

Company Secretary

Commercial Director

Project Finance Manager

Banking Executive

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

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