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Business Loan Agreement for Hong Kong

Business Loan Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that establishes the terms and conditions of a commercial loan between a lender and a business borrower. The agreement details the loan amount, interest rates, repayment terms, security arrangements, borrower's obligations, events of default, and remedies available to the lender. It incorporates relevant requirements under Hong Kong's Banking Ordinance and Contract Law, ensuring compliance with local financial regulations while providing adequate protection for both parties' interests in the lending relationship.

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Business Loan Agreement

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What is a Business Loan Agreement?

The Business Loan Agreement serves as the primary documentation for commercial lending transactions in Hong Kong, establishing legally binding obligations between financial institutions and business borrowers. This document is essential when a company seeks debt financing for business operations, expansion, or other commercial purposes. It must comply with Hong Kong's regulatory framework, including the Banking Ordinance (Cap. 155), Money Lenders Ordinance (Cap. 163), and Contract Law principles. The agreement typically includes detailed provisions on loan facilities, security arrangements, financial covenants, and enforcement mechanisms, tailored to meet the specific requirements of Hong Kong's commercial lending practices and the parties' business needs.

What sections should be included in a Business Loan Agreement?

1. Parties: Identification of the lender and borrower with full legal names and registration details

2. Background: Context of the loan agreement, including purpose of the loan and any relevant business relationship

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

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

5. Interest and Fees: Interest rate, calculation method, payment periods, and any applicable fees

6. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

7. Conditions Precedent: Conditions that must be satisfied before the loan can be drawn

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

9. Covenants: Positive and negative obligations of the borrower during the loan term

10. Events of Default: Circumstances that would constitute default and their consequences

11. Security: Basic security provisions and cross-reference to security documents

12. Payments and Calculations: Payment mechanics, business day conventions, and calculation principles

13. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

14. Notices: Communication methods and contact details for formal notices

15. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

16. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction for disputes

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

1. Guarantee Provisions: Required when there are guarantors for the loan

2. Subordination: Needed when there are multiple lenders or existing loans requiring priority arrangements

3. Special Drawing Conditions: Used for multiple tranches or special drawdown requirements

4. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

5. Additional Security Provisions: Required for complex security arrangements or multiple types of security

6. Financial Covenants: Detailed financial maintenance covenants for larger or more complex loans

7. Tax Gross-Up and Indemnities: Required for cross-border loans or when tax implications need specific attention

8. Agency Provisions: Needed in syndicated loans with an agent bank

9. Currency Provisions: Required for multi-currency facilities or foreign currency loans

What schedules should be included in a Business Loan Agreement?

1. Schedule 1 - Conditions Precedent: Detailed list of required documents and conditions before drawdown

2. Schedule 2 - Form of Drawdown Notice: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Security Details: Specific details of all security assets and documentation

5. Schedule 5 - Fee Schedule: Breakdown of all applicable fees and charges

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

7. Appendix A - Calculation of Interest: Detailed methods and examples of interest calculations

8. Appendix B - Form of Notice: Templates for various notices required 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

Hong Kong

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions






























































Clauses







































Relevant Industries

Banking and Financial Services

Commercial Lending

Real Estate

Manufacturing

Retail

Technology

Healthcare

Construction

Import/Export

Logistics

Professional Services

Hospitality

Education

Agriculture

Energy

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit

Corporate Banking

Commercial Banking

Operations

Business Development

Company Secretarial

Executive Management

Relationship Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Legal Counsel

Compliance Officer

Risk Manager

Credit Manager

Business Development Manager

Corporate Banking Officer

Loan Officer

Commercial Director

Company Secretary

Managing Director

Chief Executive Officer

Operations Manager

Account Manager

Relationship 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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