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Loan Commitment Agreement for Indonesia

Loan Commitment Agreement Template for Indonesia

A legally binding agreement governed by Indonesian law that establishes a lender's commitment to provide a specified loan facility to a borrower under defined terms and conditions. The document outlines the facility amount, availability period, drawdown mechanics, interest rates, fees, and repayment terms, while ensuring compliance with Indonesian banking regulations and civil code requirements. It includes necessary representations, warranties, and covenants to protect the lender's interests, along with conditions precedent that must be satisfied before the facility becomes available.

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Loan Commitment Agreement

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What is a Loan Commitment Agreement?

The Loan Commitment Agreement serves as a crucial financial instrument in Indonesian banking and finance transactions, establishing the framework for credit facilities before the actual disbursement of funds. This document type is essential when a borrower requires certainty of funding availability for future use, such as project financing, working capital, or expansion plans. The agreement must comply with Indonesian banking regulations, including Bank Indonesia and OJK (Financial Services Authority) requirements, and the Indonesian Civil Code. It typically precedes the actual loan agreement and provides detailed terms including facility amount, availability period, conditions for drawdown, fees, and security requirements. The Loan Commitment Agreement is particularly important in the Indonesian context where regulatory approvals and specific documentation requirements must be satisfied before loan disbursement.

What sections should be included in a Loan Commitment Agreement?

1. Parties: Identification of the lender and borrower with complete legal names and addresses

2. Background: Context of the loan commitment, including purpose and any relevant prior agreements

3. Definitions: Definitions of key terms used throughout the agreement

4. Commitment Amount: Details of the committed facility amount and any sub-limits

5. Availability Period: Period during which the borrower can draw down the loan

6. Purpose: Permitted uses of the loan facility

7. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

8. Drawdown Mechanics: Procedures and requirements for requesting and making drawdowns

9. Interest and Fees: Commitment fees, arrangement fees, and interest calculations

10. Repayment Terms: Terms for repayment of drawn amounts and commitment reduction

11. Representations and Warranties: Standard declarations made by the borrower about their status and capacity

12. Covenants: Ongoing obligations of the borrower during the commitment period

13. Events of Default: Circumstances that would allow the lender to cancel the commitment

14. Governing Law and Jurisdiction: Confirmation of Indonesian law as governing law and jurisdiction for disputes

15. Notices: Communication procedures between parties

16. Execution: Signature blocks and execution formalities

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

1. Security: Required if the facility is to be secured - details of security arrangements

2. Guarantees: Required if there are third-party guarantors for the facility

3. Tax Provisions: Detailed tax provisions required for cross-border loans or specific tax structures

4. Currency Provisions: Required for facilities in foreign currency or with multiple currency options

5. Assignment and Transfer: Required if either party needs the right to transfer their rights/obligations

6. Increased Costs and Market Disruption: Required for longer-term facilities or those with variable rates

7. Anti-Money Laundering Provisions: Required for compliance with Indonesian AML regulations, especially for large facilities

8. Force Majeure: Optional provisions for unforeseen circumstances affecting the facility

What schedules should be included in a Loan Commitment Agreement?

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

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

3. Schedule 3 - Repayment Schedule: If applicable, detailed repayment dates and amounts

4. Schedule 4 - Fee Schedule: Detailed breakdown of all applicable fees

5. Schedule 5 - Form of Compliance Certificate: Template for periodic compliance reporting

6. Appendix A - Facility Specific Terms: Detailed commercial terms of the facility

7. Appendix B - Security Documents: If applicable, forms of security documents

8. Appendix C - Required Authorizations: List of required regulatory and corporate approvals

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

Indonesia

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions























































Clauses








































Relevant Industries

Banking

Financial Services

Real Estate

Infrastructure

Manufacturing

Energy

Mining

Telecommunications

Construction

Agriculture

Retail

Technology

Healthcare

Transportation

Hospitality

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Corporate Banking

Documentation

Corporate Secretariat

Internal Audit

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Officer

Relationship Manager

Compliance Officer

Financial Controller

Banking Officer

Corporate Secretary

Senior Finance Manager

Chief Legal Officer

Credit Risk 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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