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Finance Agreement for Malaysia

Finance Agreement Template for Malaysia

A comprehensive legal document governed by Malaysian law that establishes the terms and conditions of a financial facility between a lender and borrower. The agreement encompasses crucial elements including facility amount, interest rates, repayment terms, security arrangements, and obligations of all parties involved. It ensures compliance with Malaysian financial regulations, including both conventional and Islamic banking requirements where applicable, while providing clear mechanisms for drawdown, repayment, and default scenarios. The document incorporates necessary protections under Malaysian financial services legislation and contract law.

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Finance Agreement

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What is a Finance Agreement?

The Finance Agreement serves as the primary documentation for financial facilities in Malaysia, whether for corporate or individual borrowing. This document is essential when establishing formal lending arrangements, incorporating both conventional and Islamic financing principles as required under Malaysian law. The agreement must comply with the Financial Services Act 2013, Islamic Financial Services Act 2013 (where applicable), and other relevant Malaysian legislation. It typically details the facility amount, purpose, interest/profit rates, security arrangements, representations and warranties, covenants, and events of default. The Finance Agreement is particularly crucial for businesses seeking capital expansion, project financing, or working capital facilities, and for individuals requiring substantial financing for specific purposes. It provides legal certainty and protection for all parties while ensuring regulatory compliance in Malaysia's dual banking system.

What sections should be included in a Finance Agreement?

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

2. Background: Context of the financing arrangement and purpose of the facility

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

4. Facility Details: Amount, purpose, and type of facility being provided

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

6. Drawdown Provisions: Terms and procedures for drawing down the facility

7. Interest and Fees: Interest rate, calculation method, fees, and charges applicable

8. Repayment Terms: Schedule and method of repayment, including prepayment provisions

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

10. Covenants: Positive and negative obligations of the borrower during the facility period

11. Events of Default: Circumstances constituting default and consequences thereof

12. Security: Details of security/collateral provided for the facility

13. Boilerplate Clauses: Standard legal provisions including notices, amendments, governing law

What sections are optional to include in a Finance Agreement?

1. Islamic Finance Provisions: Required when the facility follows Shariah principles, including specific Islamic financing structures

2. Guarantor Provisions: Required when a third party provides a guarantee for the facility

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

4. Security Trustee Provisions: Required in syndicated facilities with multiple lenders

5. Cross-Default Provisions: Added when the facility is part of a larger financing structure

6. Foreign Currency Provisions: Required when the facility involves foreign currency

7. Assignment and Transfer: Detailed provisions for when either party may need to transfer rights/obligations

8. Force Majeure: Added when specific unforeseen circumstances need to be addressed

What schedules should be included in a Finance Agreement?

1. Facility Details Schedule: Detailed breakdown of the facility amount, interest rates, and fees

2. Conditions Precedent Checklist: List of all required documents and conditions to be satisfied

3. Repayment Schedule: Detailed amortization table or repayment structure

4. Security Documents: Forms of security documents and perfection requirements

5. Drawing Notice Form: Standard form for drawdown requests

6. Compliance Certificate: Template for periodic compliance reporting

7. Financial Covenants Schedule: Detailed financial ratios and calculations required

8. Permitted Security Schedule: List of pre-approved security interests or liens

9. Bank Account Details: Designated accounts for disbursement and repayment

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

Malaysia

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions

















































Clauses






































Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Technology

Agriculture

Construction

Retail

Healthcare

Education

Transportation

Energy

Telecommunications

Mining

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Islamic Banking

Risk Management

Company Secretarial

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Finance Manager

Treasury Manager

Credit Risk Manager

Compliance Officer

Banking Relationship Manager

Loan Officer

Corporate Secretary

Financial Controller

Islamic Finance Specialist

Risk Management Officer

Company Director

Business Development Manager

Industries








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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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