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Limited Recourse Loan Agreement for Singapore

Limited Recourse Loan Agreement Template for Singapore

A Limited Recourse Loan Agreement under Singapore law is a specialized financing document where the lender's recourse is limited to specific assets or cash flows of the borrower, rather than all assets or personal guarantees. This agreement is governed by Singapore law and complies with local banking regulations, including MAS guidelines. It details the loan terms, security arrangements, and specifically defines the limited nature of the lender's recourse rights in case of default.

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Limited Recourse Loan Agreement

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What is a Limited Recourse Loan Agreement?

The Limited Recourse Loan Agreement is commonly used in project finance and asset-based lending scenarios in Singapore, where lenders agree to limit their recovery rights to specific assets or revenue streams. This document is particularly relevant when financing specific projects or assets where the lender accepts commercial risk limited to the funded project or asset. The agreement must comply with Singapore's Banking Act and MAS regulations, while incorporating specific provisions for security creation, enforcement mechanisms, and clear delineation of recourse limitations. It's especially useful in project finance structures where ring-fencing of assets and liabilities is crucial.

What sections should be included in a Limited Recourse Loan Agreement?

1. Parties: Identification and details of the lender and borrower

2. Background: Context of the loan arrangement and limited recourse nature

3. Definitions: Key terms used throughout the agreement including defined terms from relevant Singapore legislation

4. Loan Amount and Purpose: Specification of loan amount and permitted use of funds

5. Limited Recourse Provisions: Detailed terms of the limited recourse nature of the loan and limitation of liability

6. Security: Details of assets/collateral securing the loan and security creation provisions

7. Repayment Terms: Payment schedule, mechanics, and repayment obligations

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

9. Representations and Warranties: Standard and transaction-specific representations by the borrower

10. Covenants: Positive and negative undertakings by the borrower

11. Governing Law and Jurisdiction: Specification of Singapore law and jurisdiction of Singapore courts

What sections are optional to include in a Limited Recourse Loan Agreement?

1. Interest Rate Provisions: Terms for interest calculation and payment - optional if loan is interest-free

2. Currency Provisions: Terms for handling multiple currencies in cross-border transactions

3. Assignment and Transfer: Terms governing the transfer of rights and obligations under the agreement

4. Tax Provisions: Provisions dealing with taxation implications and withholding tax requirements

5. Force Majeure: Provisions dealing with extraordinary events affecting performance

What schedules should be included in a Limited Recourse Loan Agreement?

1. Schedule 1 - Security Assets: Detailed list and description of assets securing the loan

2. Schedule 2 - Repayment Schedule: Detailed payment dates and amounts

3. Schedule 3 - Form of Drawdown Notice: Template for requesting loan disbursement

4. Schedule 4 - Conditions Precedent: List of conditions to be satisfied before drawdown

5. Schedule 5 - Security Documents: Forms of security documentation and perfection requirements

6. Schedule 6 - Notice Details: Contact information and addresses for notices

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

Singapore

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions













































Clauses


































Industries

Banking Act (Cap. 19): Primary legislation governing banking institutions and activities in Singapore, relevant for loan structuring and regulatory compliance

Moneylenders Act (Cap. 188): Regulates moneylending activities in Singapore, ensuring compliance with lending regulations and licensing requirements

Securities and Futures Act (Cap. 289): Relevant if the loan agreement involves any securities or has characteristics of securities products

Companies Act (Cap. 50): Governs corporate borrowing powers and related corporate law matters

Contract Law Act (Cap. 53): Fundamental legislation governing contract formation, validity, and enforcement in Singapore

Misrepresentation Act (Cap. 390): Addresses false statements or misrepresentations in contract formation and provides remedies

Civil Law Act (Cap. 43): Contains provisions relating to civil law matters including contractual relationships

Property Law Act (Cap. 242): Relevant for security interests over property in limited recourse arrangements

Conveyancing and Law of Property Act (Cap. 61): Governs transactions involving property and security interests over real estate

Registration of Deeds Act (Cap. 269): Requirements for registration of certain instruments and documents

MAS Guidelines: Regulatory guidelines issued by Monetary Authority of Singapore affecting lending practices

MAS Notice 643: Specific regulations governing transactions with related parties

MAS Notice 639: Regulations regarding exposures to single counterparty groups

Insolvency, Restructuring and Dissolution Act 2018: Critical for limited recourse provisions and understanding creditor rights in default scenarios

Personal Property Securities Act: Future legislation (when enacted) affecting security interests over personal property

Limitations Act (Cap. 163): Establishes time limits for enforcement of contractual rights and legal actions

Rules of Court: Procedural rules governing enforcement proceedings in Singapore courts

Consumer Protection (Fair Trading) Act: May be applicable if the borrower qualifies for consumer protection under Singapore law

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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