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Drawdown Loan Agreement for New Zealand

Drawdown Loan Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes a flexible lending arrangement where funds can be drawn down in multiple tranches over time, up to an agreed maximum facility limit. The agreement sets out the terms and conditions for drawdowns, including notice requirements, conditions precedent, interest calculations, repayment terms, and borrower obligations. It incorporates New Zealand-specific regulatory requirements, including those under the Credit Contracts and Consumer Finance Act 2003 and other relevant financial services legislation, while providing mechanisms for security, monitoring, and enforcement.

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Drawdown Loan Agreement

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What is a Drawdown Loan Agreement?

The Drawdown Loan Agreement is a crucial financing document used in New Zealand when parties require a flexible lending arrangement that allows for multiple withdrawals of funds over time, rather than a single lump sum advance. This type of agreement is particularly suitable for projects with staged funding needs, working capital facilities, or construction financing. The document must comply with New Zealand's regulatory framework, including the Credit Contracts and Consumer Finance Act 2003, Contract and Commercial Law Act 2017, and relevant financial services legislation. It typically includes comprehensive provisions for facility limits, drawdown mechanics, conditions precedent, interest calculations, security arrangements, and borrower covenants, while incorporating specific New Zealand legal and commercial practices.

What sections should be included in a Drawdown Loan Agreement?

1. Parties: Identifies and defines the Lender and Borrower with their full legal names and addresses

2. Background: Contextual information explaining the purpose of the loan facility and the parties' intentions

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. The Facility: Details of the loan facility including the total amount, purpose, and term

5. Drawdown: Mechanics and conditions for drawing down the loan, including notice requirements and minimum amounts

6. Interest and Fees: Interest rate provisions, calculation methods, and applicable fees

7. Repayment: Terms for repayment including scheduled payments, prepayment rights, and final maturity

8. Representations and Warranties: Borrower's confirmations about their legal status, capacity, and financial condition

9. Undertakings: Ongoing obligations of the Borrower during the term of the facility

10. Events of Default: Circumstances constituting default and their consequences

11. General Provisions: Standard clauses covering notices, amendments, assignments, governing law, etc.

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

1. Security: Required if the loan is secured - details of security arrangements and enforcement rights

2. Guarantee: Required if there are guarantors - terms of guarantee and guarantor obligations

3. Conditions Precedent: Include if there are specific conditions that must be met before the facility becomes available

4. Financial Covenants: Include for corporate borrowers or larger facilities - specific financial ratios and requirements

5. Special Drawdown Conditions: Include if different tranches have different conditions or if project-specific drawdown requirements exist

6. Tax Provisions: Detailed section needed if complex tax implications or cross-border elements exist

7. Multiple Borrowers: Required if more than one borrower - joint and several liability provisions

What schedules should be included in a Drawdown Loan Agreement?

1. Drawdown Notice: Template form for requesting drawdowns under the facility

2. Repayment Schedule: If applicable, detailed schedule of repayment dates and amounts

3. Fee Schedule: Detailed breakdown of all applicable fees and charges

4. Security Details: If secured, detailed description of security assets and arrangements

5. Conditions Precedent Documents: List of required documents and conditions to be satisfied

6. Compliance Certificate: Template for periodic compliance reporting

7. Calculation of Interest Rate: If complex, detailed methodology for interest calculations

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

New Zealand

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions






















































Clauses






































Relevant Industries

Banking & Financial Services

Real Estate & Property

Construction & Infrastructure

Manufacturing

Retail & Commerce

Agriculture & Farming

Technology & Software

Healthcare

Education

Professional Services

Mining & Resources

Transport & Logistics

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Commercial

Corporate Banking

Operations

Risk Management

Project Finance

Company Secretariat

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Loan Officer

Credit Manager

Risk Manager

Relationship Manager

Compliance Officer

Financial Controller

Company Secretary

Commercial Director

Project Finance Manager

Banking Executive

General Counsel

Industries








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