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Debt Financing Agreement for the United Kingdom

Debt Financing Agreement Template for England and Wales

A Debt Financing Agreement under English and Welsh law is a legally binding contract that establishes the terms and conditions under which a lender provides financial accommodation to a borrower. The agreement details the loan amount, interest rates, repayment terms, security arrangements, and the rights and obligations of all parties involved. It incorporates specific provisions required by English law and regulatory requirements, including those set by the Financial Conduct Authority and Prudential Regulation Authority where applicable.

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Debt Financing Agreement

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What is a Debt Financing Agreement?

The Debt Financing Agreement is a crucial document used when a business or entity seeks to obtain funding through debt rather than equity. This agreement, governed by English and Welsh law, provides a comprehensive framework for the lending relationship, including detailed terms about the facility, security arrangements, representations and warranties, and events of default. It's particularly important in commercial lending scenarios where significant sums are involved and where regulatory compliance is essential. The agreement needs to comply with UK financial services legislation and may need to consider international implications for cross-border transactions.

What sections should be included in a Debt Financing Agreement?

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

2. Background: Purpose of the financing and context of the agreement

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

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

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

6. Repayment: Repayment schedule, methods, and prepayment provisions

7. Representations and Warranties: Statements of fact and assurances given by the borrower

8. Covenants: Positive and negative obligations of the borrower

9. Events of Default: Circumstances that trigger default and consequences

10. Governing Law and Jurisdiction: Confirmation of applicable law and courts

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

1. Security: Details of any collateral or guarantees - used when the loan is secured

2. Conditions Precedent: Conditions that must be met before drawdown - used for complex or large facilities

3. Fees: Additional fees and charges - used when arrangement, commitment or other fees apply

4. Tax Gross-Up: Provisions for tax-related payments - used for cross-border transactions or where tax implications exist

What schedules should be included in a Debt Financing Agreement?

1. Form of Drawdown Notice: Template for requesting loan disbursements

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

3. Security Documents: List and copies of security documentation

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

5. Financial Covenants: Detailed financial ratios and calculations

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

England and Wales

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions













































Clauses

































Industries

Companies Act 2006: Primary legislation governing company borrowing powers, registration of charges, and directors' duties and authorities in relation to debt financing

Law of Property Act 1925: Legislation governing security over real property and mortgage provisions, essential for secured lending arrangements

Financial Services and Markets Act 2000: Regulatory framework for financial services, including licensing requirements and financial promotion restrictions

Consumer Credit Act 1974: Legislation protecting consumers in credit arrangements, applicable if borrower could be classified as a consumer

FCA Regulations: Financial Conduct Authority regulations governing conduct of business rules and regulatory compliance for regulated entities

PRA Requirements: Prudential Regulation Authority requirements applicable to regulated financial institutions acting as lenders

Money Laundering Regulations 2017: Regulations governing due diligence requirements and Know Your Customer (KYC) obligations in financial transactions

Financial Collateral Arrangements (No.2) Regulations 2003: Regulations governing arrangements involving financial collateral in lending transactions

Unfair Contract Terms Act 1977: Legislation governing the reasonableness of contract terms in commercial agreements

European Union (Withdrawal) Act 2018: Post-Brexit legislation addressing retained EU law and its implications for financial agreements

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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