Document background
The Loan Facility Letter is a fundamental banking document used in Indonesia when a financial institution agrees to provide financing to a borrower. It serves as both an offer letter and, upon acceptance, a binding agreement that establishes the framework for the lending relationship. The document must comply with Indonesian banking regulations, including requirements set by the Financial Services Authority (OJK) and Bank Indonesia. It is typically used for both corporate and individual lending, containing all essential commercial terms, conditions precedent, security requirements, and regulatory provisions. The Loan Facility Letter is often preferred over more complex facility agreements for straightforward lending arrangements, while still maintaining legal enforceability under Indonesian law.
