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Facility Loan Agreement for Australia

Facility Loan Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that establishes the terms and conditions for a loan facility between a lender and borrower. The document sets out the facility amount, interest rates, repayment terms, security arrangements, conditions precedent, representations and warranties, covenants, and events of default. It incorporates requirements under Australian financial services legislation, including the National Consumer Credit Protection Act 2009 and Banking Act 1959, while ensuring compliance with ASIC regulations and Australian banking practices.

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Facility Loan Agreement

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What is a Facility Loan Agreement?

The Facility Loan Agreement serves as the primary documentation for commercial lending arrangements in Australia, providing a legally binding framework for both lenders and borrowers. This document is essential when a business or entity seeks to obtain financing through a loan facility, whether for working capital, expansion, acquisition, or other commercial purposes. The agreement complies with Australian federal and state legislation, including financial services regulations, consumer protection laws, and banking industry standards. It contains comprehensive provisions covering facility terms, security arrangements, operational requirements, and risk mitigation measures. The Facility Loan Agreement is particularly important in the Australian context as it incorporates specific requirements under local banking regulations and ASIC guidelines, while also addressing the unique aspects of Australian security and property laws.

What sections should be included in a Facility Loan Agreement?

1. Parties: Identifies and defines the lender, borrower, and any guarantors or security providers

2. Background: Sets out the context of the loan facility and purpose of the agreement

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

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

5. Conditions Precedent: Specifies conditions that must be satisfied before drawdown

6. Drawdown: Sets out the mechanics and requirements for drawing down the facility

7. Interest: Specifies interest rates, calculation methods, and payment requirements

8. Repayment and Prepayment: Details repayment terms, schedules, and prepayment provisions

9. Representations and Warranties: Contains borrower's declarations about their status and capacity

10. Undertakings: Sets out positive and negative obligations of the borrower

11. Events of Default: Lists circumstances that constitute default and consequences

12. Security: Describes the security structure and enforcement rights

13. Costs and Expenses: Allocates responsibility for fees, costs, and expenses

14. Changes to Parties: Covers assignment and transfer provisions

15. Notices: Specifies how formal communications should be made

16. General Provisions: Contains boilerplate clauses including governing law, jurisdiction, and severability

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

1. Syndication Provisions: Required for syndicated facilities involving multiple lenders

2. Increased Costs: Used when regulatory changes might affect lending costs

3. Market Disruption: Included for facilities with variable interest rates to address market disruption events

4. Multi-currency Provisions: Required when the facility can be drawn in multiple currencies

5. Tax Gross-up and Indemnities: Detailed tax provisions for cross-border or complex lending arrangements

6. Guarantee and Indemnity: Required when third-party guarantors are involved

7. Subordination: Needed when there are multiple creditors requiring priority arrangements

8. Agent and Security Trustee: Required for syndicated facilities or when security is held on trust

What schedules should be included in a Facility Loan Agreement?

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

2. Conditions Precedent Documents: Lists all required documentation for facility drawdown

3. Form of Drawdown Notice: Template for borrower to request facility drawdown

4. Repayment Schedule: Detailed schedule of repayment dates and amounts

5. Security Documents: List and copies of all security documents

6. Financial Covenants: Detailed financial covenants and calculation methodologies

7. Form of Compliance Certificate: Template for periodic compliance certification

8. Permitted Security Interests: List of security interests allowed under the facility

9. Form of Transfer Certificate: Template for transferring facility participation

10. Contact Details: Contact information for all parties and authorized representatives

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

Banking and Financial Services

Real Estate and Property

Manufacturing

Retail and Consumer

Infrastructure and Construction

Mining and Resources

Agriculture

Healthcare

Technology

Transportation and Logistics

Energy and Utilities

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit

Risk Management

Compliance

Corporate Banking

Commercial Banking

Operations

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Relationship Manager

Credit Manager

Risk Manager

Compliance Officer

Company Secretary

Banking Executive

Finance Manager

Commercial Director

Business Development Manager

Transaction 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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