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Working Capital Facility Agreement for Malaysia

Working Capital Facility Agreement Template for Malaysia

A Working Capital Facility Agreement under Malaysian law is a comprehensive financing document that establishes the terms and conditions for providing working capital funding to businesses. The agreement is governed by Malaysian law, particularly the Financial Services Act 2013 and Contracts Act 1950, and includes detailed provisions for facility amount, interest rates, drawdown mechanisms, repayment terms, security arrangements, and borrower obligations. It incorporates specific Malaysian regulatory requirements and banking practices, while ensuring compliance with Bank Negara Malaysia guidelines and local corporate law requirements.

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Working Capital Facility Agreement

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What is a Working Capital Facility Agreement?

The Working Capital Facility Agreement is a crucial financing document used in Malaysia when businesses require funding for their day-to-day operations, inventory management, or short-term working capital needs. This agreement, governed by Malaysian law and regulatory framework, establishes the legal relationship between the financial institution and the borrower, detailing the facility amount, availability period, interest rates, security requirements, and operational mechanics of the facility. It is particularly important for businesses seeking to maintain liquidity and manage cash flow cycles, incorporating specific provisions required by Malaysian banking regulations and practice. The document needs to comply with Bank Negara Malaysia guidelines, the Financial Services Act 2013, and other relevant Malaysian legislation, while also addressing practical aspects of facility utilization and management.

What sections should be included in a Working Capital Facility Agreement?

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

2. Background: Brief context of the facility arrangement and purpose

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and interpretation rules

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

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

6. Drawdown: Conditions and procedures for utilizing the facility

7. Repayment and Prepayment: Terms for repayment, prepayment rights and consequences

8. Conditions Precedent: Documents and conditions required before facility utilization

9. Representations and Warranties: Borrower's statements of fact and assurances

10. Covenants: Positive and negative undertakings of the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Rules regarding assignment and transfer rights

13. Payments: Payment mechanics, currency, and set-off rights

14. Notices: Communication procedures between parties

15. General Provisions: Miscellaneous legal provisions including governing law and jurisdiction

What sections are optional to include in a Working Capital Facility Agreement?

1. Security: Required if the facility is secured, detailing the security structure and enforcement rights

2. Guarantee: Required if there are corporate or personal guarantors for the facility

3. Islamic Banking Provisions: Required if the facility is Shariah-compliant, including relevant Islamic banking principles

4. Multi-currency Provisions: Required if the facility can be drawn in multiple currencies

5. Group Borrower Provisions: Required if multiple group companies can utilize the facility

6. Property Related Provisions: Required if the facility is linked to specific property or real estate

7. Insurance: Required if specific insurance coverage is mandatory for the facility

8. Subordination: Required if there are multiple lenders or intercreditor arrangements

What schedules should be included in a Working Capital Facility Agreement?

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

2. Form of Drawdown Notice: Template for borrower's utilization requests

3. Calculation of Interest: Detailed interest calculation methodology and examples

4. Repayment Schedule: If term facility component exists, detailed repayment dates and amounts

5. Form of Compliance Certificate: Template for periodic financial covenant compliance reporting

6. Security Documents: List and copies of all security documentation

7. Permitted Security: List of security interests permitted to exist

8. Group Structure: Corporate structure chart of borrower group if relevant

9. Existing Facilities: Details of borrower's existing financing arrangements

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

Financing Agreement

Cost

Free to use
Relevant legal definitions













































Clauses

























Relevant Industries

Manufacturing

Trading

Retail

Construction

Technology

Agriculture

Healthcare

Logistics

Food and Beverage

Services

Wholesale

E-commerce

Real Estate

Automotive

Textile

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Operations

Risk Management

Company Secretarial

Corporate Finance

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Corporate Lawyer

Legal Counsel

Relationship Manager

Credit Officer

Risk Manager

Compliance Officer

Company Secretary

Managing Director

Corporate Banking Manager

Finance Manager

Account 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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