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Multiple Advance Promissory Note for Canada

Multiple Advance Promissory Note Template for Canada

A Multiple Advance Promissory Note is a legally binding financial instrument governed by Canadian federal and provincial laws, particularly the Bills of Exchange Act and relevant provincial regulations. This document establishes a credit facility where the lender agrees to advance funds to the borrower in multiple installments up to a predetermined maximum amount. The note details the terms of borrowing, including interest calculations, repayment schedules, draw conditions, and security arrangements. It incorporates specific Canadian legal requirements for financial instruments, including interest rate disclosure requirements under the Interest Act and compliance with provincial consumer protection legislation where applicable.

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Multiple Advance Promissory Note

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What is a Multiple Advance Promissory Note?

The Multiple Advance Promissory Note is designed for situations where funding requirements are staged or periodic, rather than needed as a single lump sum. This document is particularly useful in Canadian business contexts such as construction projects, business expansion, or working capital facilities where capital needs arise in phases. The note establishes the maximum credit facility amount, draw conditions, interest calculations, and repayment terms while ensuring compliance with Canadian federal and provincial lending regulations. It provides flexibility for borrowers to draw funds as needed while giving lenders security and clear terms for each advance. Common applications include project financing, equipment purchasing, inventory financing, and general corporate purposes where staged funding aligns with business needs.

What sections should be included in a Multiple Advance Promissory Note?

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Brief context of the lending arrangement and purpose of the multiple advance facility

3. Definitions: Key terms used throughout the note including 'Advance', 'Available Credit', 'Draw Period', 'Interest Rate', and 'Maturity Date'

4. Promise to Pay: Unconditional promise by the Borrower to pay the Principal Amount plus Interest

5. Multiple Advance Facility: Terms governing the multiple advances, including maximum facility amount and draw conditions

6. Interest Calculation: Method of interest calculation, rate, and compounding frequency

7. Repayment Terms: Schedule and methods of repayment, including minimum payments and treatment of multiple advances

8. Prepayment Provisions: Terms and conditions for early repayment of the loan

9. Events of Default: Circumstances constituting default and consequences thereof

10. Security: Description of any security or collateral securing the note

11. Governing Law: Specification of Canadian law as governing law

12. Execution: Signature blocks and date of execution

What sections are optional to include in a Multiple Advance Promissory Note?

1. Guarantor Provisions: Required when there is a guarantor for the note, including guarantor's obligations and rights

2. Joint and Several Liability: Include when there are multiple borrowers to establish their joint responsibility

3. Currency Provisions: Required for notes where advances or repayments may be in multiple currencies

4. Draw Notice Requirements: Include when formal draw notice procedures are required for advances

5. Financial Covenants: Include when the borrower must maintain certain financial metrics

6. Assignment and Transferability: Include when the note needs to be transferable or assignable

7. Electronic Execution: Include when the note may be executed electronically

What schedules should be included in a Multiple Advance Promissory Note?

1. Schedule A - Draw Schedule: Details of planned or permitted draw dates and amounts

2. Schedule B - Repayment Schedule: Detailed amortization schedule for repayment of advances

3. Schedule C - Interest Rate Calculation: Detailed methodology for interest calculation and examples

4. Schedule D - Draw Notice Form: Standard form for requesting advances under the note

5. Appendix 1 - Security Documentation: Forms and details of any security or collateral arrangements

6. Appendix 2 - Guarantor Acknowledgment: Required documentation from any guarantors

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

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions













































Clauses






























Relevant Industries

Banking & Financial Services

Real Estate Development

Construction

Manufacturing

Technology

Energy

Infrastructure

Agriculture

Healthcare

Mining

Retail

Commercial Property

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Commercial Lending

Project Finance

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Banking Relationship Manager

Credit Manager

Loan Officer

Financial Controller

Risk Manager

Compliance Officer

Project Finance Manager

Corporate Secretary

Business Development Manager

Account Manager

Industries







Teams

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