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Credit Purchase Agreement for Canada

Credit Purchase Agreement Template for Canada

A comprehensive legal agreement governed by Canadian federal and provincial laws that establishes the terms and conditions under which a lender extends credit to a borrower. The document encompasses detailed provisions for credit facilities, interest calculations, repayment terms, security arrangements, and default remedies, while ensuring compliance with Canadian banking regulations, consumer protection laws, and interest rate requirements. It includes specific provisions required under Canadian jurisdiction such as language requirements for Quebec-based agreements and compliance with federal interest rate regulations.

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Credit Purchase Agreement

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What is a Credit Purchase Agreement?

The Credit Purchase Agreement serves as the primary documentation for credit facilities in Canada, establishing the legal framework for lending relationships between financial institutions and borrowers. This document is essential when a party requires credit financing and must comply with Canadian federal legislation such as the Interest Act, Bank Act, and provincial consumer protection laws. The agreement typically includes detailed terms regarding credit limits, interest calculations, repayment schedules, security arrangements, and default provisions. It's particularly important in commercial lending scenarios and must be structured to comply with both federal and provincial requirements, including specific provisions for Quebec civil law when applicable. The document should address all aspects of the credit relationship while ensuring compliance with Canadian usury laws and mandatory disclosure requirements.

What sections should be included in a Credit Purchase Agreement?

1. Parties: Identification of all parties to the agreement including the lender and borrower(s)

2. Background: Context of the credit purchase arrangement and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

4. Credit Facility: Details of the credit amount, purpose, and availability

5. Interest and Fees: Interest rate, calculation method, fees, and charges

6. Repayment Terms: Payment schedule, prepayment provisions, and payment methods

7. Conditions Precedent: Conditions that must be satisfied before credit becomes available

8. Representations and Warranties: Statements of fact and assurances made by the borrower

9. Covenants: Ongoing obligations of the borrower during the term of the agreement

10. Events of Default: Circumstances constituting default and consequences

11. Remedies: Lender's rights and remedies upon default

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

What sections are optional to include in a Credit Purchase Agreement?

1. Security Arrangements: Include when the credit facility is secured by specific assets or collateral

2. Guarantees: Include when there are third-party guarantors for the credit facility

3. Insurance Requirements: Include when specific insurance coverage is required for secured assets

4. Multiple Borrower Provisions: Include when there are multiple borrowers with joint and several liability

5. Currency Provisions: Include for cross-border transactions or multiple currency facilities

6. Set-off Rights: Include when the lender requires explicit right to set off against borrower's other accounts

7. Syndication Provisions: Include when the credit facility may be syndicated to other lenders

8. Environmental Representations: Include when environmental risks are relevant to the credit facility

What schedules should be included in a Credit Purchase Agreement?

1. Schedule A - Credit Terms: Detailed breakdown of credit amount, interest rates, fees, and payment schedule

2. Schedule B - Conditions Precedent: Detailed list of all conditions to be satisfied before drawdown

3. Schedule C - Security Documents: List and copies of all security documents and registrations

4. Schedule D - Drawdown Procedures: Detailed procedures for requesting and processing drawdowns

5. Schedule E - Permitted Liens: List of existing liens or encumbrances permitted under the agreement

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

7. Appendix 1 - Form of Drawdown Notice: Standard form for requesting drawdowns under the facility

8. Appendix 2 - Form of Assignment: Standard form for assigning rights under the agreement

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

Jurisdiction

Canada

Cost

Free to use
Relevant legal definitions









































Clauses






























Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Technology

Construction

Agriculture

Healthcare

Transportation

Energy

Mining

Telecommunications

Professional Services

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Credit Administration

Corporate Secretariat

Business Development

Account Management

Underwriting

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Treasury Manager

Financial Controller

Compliance Officer

Credit Analyst

Banking Relationship Manager

Corporate Secretary

Business Development Manager

Account Manager

Underwriting 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, 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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