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The Business Credit Agreement serves as the primary legal instrument for documenting credit facilities extended to businesses in Pakistan. It is used when a business entity requires financing for various purposes such as working capital, expansion, or asset acquisition. The agreement must comply with Pakistani banking regulations, including the Banking Companies Ordinance 1962 and Financial Institutions (Recovery of Finances) Ordinance 2001. It encompasses detailed provisions for facility terms, security arrangements, borrower obligations, and enforcement mechanisms. The document can be adapted for both conventional and Islamic banking structures, incorporating relevant provisions based on the chosen financing mode. This agreement is crucial for establishing legally binding credit relationships while protecting the interests of both the lender and borrower under Pakistani law.

1. Parties: Identification of the lender (financial institution) and borrower (business entity), including their legal status and registration details

2. Background: Context of the credit facility, including the purpose of the loan and brief description of the business relationship

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms, security-related terms, and other technical terminology

4. Facility Details: Specific details of the credit facility including amount, purpose, and type of facility

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

6. Drawdown: Conditions and procedures for accessing the credit facility

7. Repayment Terms: Schedule and method of repayment, including installment structure and prepayment provisions

8. Security Arrangements: Details of collateral, guarantees, or other security provided for the facility

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 that constitute default and their consequences

12. Termination: Conditions and procedures for terminating the agreement

13. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and jurisdiction for disputes