The Line of Credit Letter is a crucial financial instrument used in the Netherlands when a lender agrees to provide flexible, revolving credit to a borrower. This document is typically employed when businesses or individuals require ongoing access to credit for working capital, operational expenses, or other regular funding needs. The letter, governed by Dutch law and regulations including the Financial Supervision Act (Wft) and Dutch Civil Code, sets out the fundamental terms of the credit relationship including the facility limit, interest rates, fees, drawing conditions, and repayment terms. It serves as both the formal offer of the facility and, once accepted, the binding agreement between parties. The document must comply with Dutch banking regulations and financial services laws, particularly regarding consumer protection when applicable, and typically includes provisions for security, covenants, and events of default.
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1. Letter Header: Bank's letterhead, date, and recipient's details
2. Salutation: Formal greeting to the authorized representative of the borrower
3. Reference Line: Clear reference to any previous discussions or applications
4. Facility Overview: Brief introduction stating the purpose and nature of the line of credit
5. Key Terms: Credit limit, interest rate, term, and purpose of the facility
6. Availability and Drawing: Conditions for drawing on the facility and availability period
7. Interest and Fees: Detailed breakdown of interest calculation, fees, and charges
8. Repayment Terms: Minimum payments, payment schedule, and repayment obligations
9. Key Conditions Precedent: Essential conditions that must be met before the facility becomes available
10. Representations: Key statements about the borrower's status and capacity
11. Main Covenants: Principal ongoing obligations of the borrower
12. Events of Default: Key circumstances that would trigger default
13. Acceptance: Instructions for accepting the offer and signature blocks
1. Security Arrangements: Include when the facility requires specific security or guarantees
2. Special Drawing Conditions: When there are specific requirements or restrictions for drawing the facility
3. Financial Covenants: When specific financial ratios or conditions need to be maintained
4. Review and Renewal: When the facility includes specific review periods or renewal options
5. Insurance Requirements: When specific insurance coverage is required
6. Regulatory Compliance: When specific regulatory requirements need to be highlighted
7. Cross-Default Provisions: When the facility needs to be linked to other facilities or agreements
1. Fee Schedule: Detailed breakdown of all applicable fees and charges
2. Drawing Notice Form: Standard form for requesting drawings under the facility
3. Conditions Precedent Checklist: Detailed list of all required documents and conditions
4. Compliance Certificate Template: Standard form for periodic compliance certification
5. Financial Covenant Calculations: Detailed explanation of financial covenant calculations if applicable
6. Security Details: Detailed description of any security arrangements if applicable
7. Required Insurance Coverage: Detailed insurance requirements if applicable
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Banking and Financial Services
Manufacturing
Retail
Real Estate
Technology
Construction
Healthcare
Agriculture
Transportation and Logistics
Energy
Professional Services
Wholesale Trade
Hospitality
Relevant Teams
Legal
Finance
Treasury
Risk Management
Compliance
Credit Administration
Corporate Banking
Operations
Business Development
Account Management
Relevant Roles
Chief Financial Officer
Finance Director
Treasury Manager
Credit Manager
Relationship Manager
Legal Counsel
Risk Manager
Corporate Banking Officer
Compliance Officer
Financial Controller
Credit Analyst
Corporate Secretary
Business Development Manager
Account Manager
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