tiktok���˰�

A Credit Agreement is a legally binding contract between a lender and borrower that spells out the terms of a loan. In Saudi Arabia, these agreements must comply with Shariah principles and the Banking Control Law, which means they avoid traditional interest structures in favor of profit-sharing arrangements.

The agreement details crucial elements like payment schedules, profit rates, collateral requirements, and the borrower's obligations. It protects both parties by clearly stating what happens if payments are missed or other terms are broken. For Saudi businesses and individuals, these agreements typically go through licensed Saudi banks and financial institutions operating under SAMA (Saudi Central Bank) guidelines.

Use a Credit Agreement when your business needs financing that follows Saudi Arabia's Shariah-compliant banking principles. This essential document comes into play for major purchases, business expansion, or working capital needs—any situation where you're seeking funds from a Saudi bank or licensed financial institution.

The agreement becomes crucial during significant transactions like real estate purchases, equipment financing, or corporate acquisitions. It's particularly important when dealing with SAMA-regulated banks, as they require detailed documentation of profit-sharing arrangements, payment terms, and security interests. Having this agreement in place helps prevent misunderstandings and ensures compliance with Saudi banking regulations.

• Line Of Credit Agreement: Provides flexible access to funds up to a preset limit, popular with businesses needing ongoing working capital
• Revolving Credit Loan Agreement: Allows repeated borrowing and repayment within the credit limit, ideal for managing seasonal cash flow
• Credit Purchase Agreement: Specifically for buying goods or services on credit terms, common in trade finance
• Simple Loan Note Agreement: Basic lending document for straightforward, one-time loans with fixed terms
• Credit Sale Agreement: Used for installment-based purchases, often in retail or equipment financing

• Saudi Banks and Financial Institutions: Draft and issue Credit Agreements under SAMA regulations, ensuring Shariah compliance and proper documentation
• Corporate Borrowers: Companies seeking financing for expansion, equipment, or working capital needs through Islamic banking channels
• Legal Counsel: Review and negotiate terms, ensuring alignment with Saudi commercial law and Shariah principles
• Shariah Advisors: Verify Islamic compliance of profit-sharing structures and financing terms
• Business Owners: Sign agreements as personal guarantors, often required by Saudi banks for corporate lending
• Compliance Officers: Monitor adherence to agreement terms and regulatory requirements

• Basic Details: Gather full legal names, addresses, and registration numbers of all parties involved
• Financing Terms: Document the amount, profit rate, payment schedule, and duration aligned with Shariah principles
• Collateral Information: List all assets or guarantees securing the credit, including current valuations
• Business Documentation: Prepare financial statements, business licenses, and commercial registration details
• Legal Requirements: Check SAMA guidelines and ensure Shariah compliance for the specific type of financing
• Template Selection: Use our platform's Saudi-specific templates to generate a compliant Credit Agreement that includes all required elements
• Internal Review: Verify all terms match your negotiated agreement before finalizing

• Party Details: Complete legal names, addresses, and registration numbers of lender and borrower
• Financing Structure: Shariah-compliant profit-sharing arrangement, avoiding traditional interest terms
• Payment Terms: Clear schedule of amounts, dates, and profit calculation methods
• Security Provisions: Detailed description of collateral, guarantees, or other security arrangements
• Default Procedures: Specific actions and remedies under Saudi law if payment obligations aren't met
• Governing Law: Express statement of Saudi law application and SAMA regulations
• Dispute Resolution: Agreed method for handling conflicts under Saudi jurisdiction
• Termination Rights: Conditions and process for early termination or acceleration

A Credit Agreement differs significantly from an Asset Purchase Agreement in several key ways, though both are common in Saudi business transactions. While Credit Agreements focus on Shariah-compliant financing arrangements, Asset Purchase Agreements deal with the direct transfer of ownership of specific assets.

• Purpose: Credit Agreements establish ongoing financing relationships with profit-sharing structures, while Asset Purchase Agreements document one-time asset transfers
• Payment Structure: Credit Agreements involve scheduled payments over time with Islamic profit mechanisms; Asset Purchase Agreements typically involve lump-sum or installment payments for asset value
• Regulatory Framework: Credit Agreements must meet SAMA banking regulations and Shariah requirements; Asset Purchase Agreements follow Saudi commercial law but with fewer banking-specific restrictions
• Risk Profile: Credit Agreements require more extensive security arrangements and guarantees; Asset Purchase Agreements focus more on asset condition and transfer warranties