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Supplemental Loan Agreement for Canada

Supplemental Loan Agreement Template for Canada

A Supplemental Loan Agreement is a legal document used in Canadian jurisdictions to modify, amend, or supplement the terms of an existing loan agreement. It operates under Canadian federal banking laws and provincial contract laws, providing a framework for adjusting key loan terms such as interest rates, payment schedules, security arrangements, or loan amounts. The document maintains continuity with the original agreement while incorporating necessary changes, ensuring compliance with Canadian banking regulations, including the Interest Act and relevant provincial legislation. It serves as a crucial tool for lenders and borrowers to adapt their lending arrangements to changing circumstances without executing an entirely new loan agreement.

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Supplemental Loan Agreement

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What is a Supplemental Loan Agreement?

The Supplemental Loan Agreement is essential in Canadian lending practices when parties need to modify an existing loan arrangement without creating an entirely new agreement. It is commonly used when circumstances require adjustments to loan terms, such as extending the repayment period, modifying interest rates, changing security arrangements, or altering financial covenants. This document type must comply with Canadian federal banking regulations and provincial contract laws, making it suitable for both commercial and institutional lending scenarios. The agreement typically references the original loan document and clearly outlines which terms are being modified while confirming which original terms remain in effect. It's particularly relevant in situations involving refinancing, debt restructuring, or when the borrower's circumstances have changed significantly since the original loan was executed.

What sections should be included in a Supplemental Loan Agreement?

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

2. Background: References to the original loan agreement, reason for supplemental agreement, and current status

3. Definitions: Definitions of terms used in the agreement, including reference to original definitions that remain applicable

4. Interpretation: Rules for interpreting the agreement and its relationship with the original loan agreement

5. Amendments to Original Agreement: Specific modifications to the original loan agreement, clearly identified by section reference

6. Confirmation of Other Terms: Confirmation that unmodified terms of the original agreement remain in full force and effect

7. Conditions Precedent: Conditions that must be satisfied before the supplemental agreement becomes effective

8. Representations and Warranties: Updated or additional representations and warranties of the parties

9. Security: Confirmation of existing security arrangements and any modifications

10. Costs and Expenses: Allocation of costs related to the preparation and execution of the supplemental agreement

11. Governing Law and Jurisdiction: Confirmation of applicable law and jurisdiction for dispute resolution

12. Execution: Signature blocks and execution requirements

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

1. Additional Loan Amount: Required if the supplemental agreement increases the loan amount

2. Interest Rate Modification: Include when modifying the interest rate structure

3. Payment Terms Modification: Required when changing payment schedule or terms

4. Additional Security: Include when new security is being added to the loan

5. Waiver of Defaults: Include when addressing any existing defaults under the original agreement

6. Additional Covenants: Required when adding new borrower obligations

7. Release Provisions: Include when releasing any parties, security, or obligations

8. Extension Provisions: Required when extending the term of the original loan

What schedules should be included in a Supplemental Loan Agreement?

1. Schedule A - Original Loan Agreement: Copy or summary of the original loan agreement being modified

2. Schedule B - Amended Payment Schedule: Updated amortization and payment schedule if payment terms are modified

3. Schedule C - Additional Security Details: Description of any new security being provided

4. Schedule D - Compliance Certificate: Form of certificate confirming compliance with conditions precedent

5. Schedule E - Modified Financial Covenants: Details of any new or modified financial covenants

6. Appendix 1 - Consent of Guarantors: Written consent of any guarantors to the modifications

7. Appendix 2 - Corporate Authorizations: Required corporate resolutions and authorizations

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

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions





































Clauses






























Relevant Industries

Banking & Financial Services

Real Estate

Commercial Property

Manufacturing

Retail

Technology

Healthcare

Construction

Agriculture

Energy

Infrastructure

Transportation

Mining

Telecommunications

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Secretariat

Commercial Banking

Loan Administration

Risk Management

Portfolio Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Loan Officer

Credit Manager

Risk Manager

Commercial Banking Manager

Corporate Secretary

Financial Controller

Compliance Officer

Banking Relationship Manager

Senior Credit Analyst

Portfolio Manager

Debt Restructuring Specialist

Industries








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