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Bridge Financing Agreement Template for Switzerland

A Bridge Financing Agreement under Swiss law is a specialized financial contract that establishes the terms and conditions for temporary financing provided to bridge a gap between immediate capital needs and a future financing event or cash inflow. The agreement, governed by Swiss law including the Code of Obligations (OR), details the loan amount, interest rates, repayment terms, conditions precedent, and security arrangements if applicable. It includes specific provisions for drawdown mechanics, representations and warranties, covenants, and events of default, all structured within the Swiss legal framework. The document typically anticipates a defined exit or repayment event, such as a refinancing, sale, or longer-term financing arrangement.

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What is a Bridge Financing Agreement?

A Bridge Financing Agreement is essential in situations where a company requires immediate funding but anticipates a future event that will provide longer-term financing or cash flow. This document, governed by Swiss law, is commonly used in corporate transactions, acquisitions, or development projects where there is a timing gap between capital needs and expected future funding. The agreement details all aspects of the bridge loan, including amount, interest, repayment terms, security (if any), and conditions precedent. It's particularly relevant in M&A transactions, project financing, or when companies are awaiting regulatory approvals or completion of due diligence for longer-term financing. The document must comply with Swiss banking and financial regulations, particularly the Federal Banking Act and Code of Obligations, and may include provisions for conversion to equity or refinancing through permanent facilities.

What sections should be included in a Bridge Financing Agreement?

1. Parties: Identification of the lender(s) and borrower(s) with full legal details

2. Background: Context of the bridge financing, including purpose and intended longer-term financing or exit

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. The Facility: Core terms of the bridge loan including amount, purpose, and availability

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

6. Drawdown: Process and requirements for drawing down the loan

7. Interest: Interest rate, calculation method, and payment terms

8. Repayment and Prepayment: Repayment terms, maturity date, and prepayment provisions

9. Representations and Warranties: Standard representations and warranties by the borrower

10. Covenants: Positive and negative covenants of the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Assignment and transfer provisions

13. Notices: Communication requirements and contact details

14. Calculations and Certificates: Provisions regarding calculations and certifications

15. General Provisions: Miscellaneous legal provisions including partial invalidity, remedies, amendments

16. Governing Law and Jurisdiction: Choice of Swiss law and jurisdiction provisions

What sections are optional to include in a Bridge Financing Agreement?

1. Security: Details of any security or guarantees - include if the bridge financing is secured

2. Conversion Rights: Terms for converting the bridge loan into equity - include if conversion rights are offered

3. Ranking and Subordination: Provisions regarding ranking of the bridge loan - include if there are other creditors

4. Agent Provisions: Administrative provisions for a facility agent - include if there are multiple lenders

5. Tax Gross Up and Indemnities: Tax-related provisions - include if cross-border elements exist

6. Fees and Expenses: Details of arrangement fees and costs - include if there are significant transaction costs

7. Information Undertakings: Specific reporting requirements - include for larger facilities

8. Currency Provisions: Currency conversion and risk provisions - include if multiple currencies involved

What schedules should be included in a Bridge Financing Agreement?

1. Facility Terms: Detailed terms of the facility including amounts, interest rates, and key dates

2. Conditions Precedent Documents: List of required documents and conditions

3. Form of Drawdown Request: Template for drawdown notices

4. Calculation of Interest: Detailed interest calculation methodology

5. Form of Transfer Certificate: Template for transferring loan participations

6. Security Documents: Forms of security documents if applicable

7. Conversion Mechanics: Detailed procedures for exercising conversion rights if applicable

8. Repayment Schedule: Detailed repayment terms and dates

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

Jurisdiction

Switzerland

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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