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The Business Loan Agreement serves as the primary documentation for commercial financing arrangements in Saudi Arabia, structured in compliance with Islamic finance principles and Saudi law. This document is essential when businesses seek funding for expansion, working capital, asset acquisition, or other commercial purposes. It must adhere to Sharia principles prohibiting conventional interest (riba) and typically employs accepted Islamic financing structures such as Murabaha, Ijara, or Tawarruq. The agreement includes comprehensive details about the facility, security arrangements, obligations of parties, and enforcement mechanisms, all within the framework of Saudi Arabian commercial and banking laws. It's particularly important that the document maintains compliance with Saudi Central Bank (SAMA) regulations and incorporates necessary provisions for both conventional commercial lending and Islamic finance requirements.

1. Parties: Identification of the lender (financial institution) and borrower (business entity), including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the loan agreement, purpose of the facility, and confirmation of Sharia compliance

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms, Sharia-specific concepts, and technical terminology

4. Facility Details: Specifics of the loan facility, including amount, purpose, and Sharia-compliant structure (e.g., Murabaha, Ijara, or Tawarruq)

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Disbursement Mechanism: Procedures and requirements for drawing down the loan facility

7. Payment Terms: Repayment schedule, profit rate calculation (Sharia-compliant), and payment mechanics

8. Security and Guarantees: Details of collateral, guarantees, and security arrangements

9. Representations and Warranties: Statements of fact and assurances from the borrower

10. Covenants: Positive and negative obligations of the borrower during the loan term

11. Events of Default: Circumstances constituting default and consequences thereof

12. Remedies: Rights and remedies available to the lender upon default

13. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts